Business News – Williams to Trade on Commodities Experience

Posted: 04/2000

Business News

Williams to Trade
on Commodities Experience
By Ken Branson and Khali Henderson

Williams’ communications arm, Williams Communications Group Inc.
( announced in mid-February that it has formalized a strategy for bandwidth trading with intent to become
a leader in setting trading standards for
the industry.

While the move is surprising given the carrier’s heretofore reticence to back commoditization of bandwidth, it also is an easy transition for the company which has been trading energy commodities for years.

Williams has named Sharon Crow, a veteran trader on the corporation’s energy side, to be its new vice president-bandwidth markets.

Williams is not the first of the energy traders to embrace bandwidth trading. Energy company Enron’s communications subsidiary has been among the most vocal of carriers to call for commodity trading of bandwidth. The company tendered a detailed proposal for an OTC trading system. And, it recently has changed its name from Enron Communications to Enron Broadband Services
( and set out to conquer the bandwidth trading universe.

“We intend to be the world’s largest buyer and seller of bandwidth, just as we’re the world’s largest buyer and seller of electricity,” Enron chairman and CEO Kenneth Lay says in a prepared statement announcing the move.

Russ McGuire, Williams Communications Group’s vice president-strategic development, says Crow has done this before.

“She (Crow) was one of the first traders when natural gas became a commodity, and she helped develop trading in electricity,”
he says.

McGuire says Crow will not spend her time swapping OC48s, but rather “building the market” in which that can be done reliably.

“Twice, she’s been through the steps that have to take place for us to have all the tools – financial tools, legal protection, standards,” McGuire says. “And the standards aren’t standards that wipe out differentiation, but standards on how you do business with each other.”

Crow adds, “The broadband network industry holds tremendous potential for delivering increased value through new market models. Technology and competition are creating new ways to deliver services that better meet the needs of network users. Williams has led similar changes in other industries, but the opportunities for new value delivery have never been as great as what is now emerging in broadband communications.”

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