----- Forwarded by Lara Leibman/Enron Communications on 04/23/01 08:52 AM 
-----

	EBS Connected Newsletter
	04/20/01 05:21 PM
		 
		 To: All EBS Employees Worldwide
		 cc: 
		 Subject: Organizational Changes from the EBS Office of the Chairman









  
       

Market Close 4/20/01 

59.99     -1.17

Bandwidth Intermediation
(through 4/13/01)

YTD Transactions         679  Counterparties              69
 
LTD Transactions        988   Counterparties             128                  
Numbers above include Long Haul, Local Loop, IP, Storage, Advertisting, DRAM 
and Satellite for North America, Europe and Asia.





      
                                                                              
                                                  April 20, 
2001                                                                



UPDATE FROM EBS OFFICE OF THE CHAIRMAN

Since its inception just two years ago, Enron Broadband Services has made 
significant progress toward achieving our ambitious goals of being the 
leading 
provider of premium broadband content and the largest buyer and seller of 
bandwidth on a global basis.  We are extremely proud of the company,s 
accomplishments and equally optimistic about the future of EBS.

The market for bandwidth intermediation and risk management is developing 
more quickly than anticipated ) faster than the markets for natural gas or 
even 
electricity had developed.  Global Trading and Risk Management has already 
executed more than 600 transactions this year, far exceeding the 321 total 
transactions executed in 2000. The Enron Intelligent Network (EIN), with
its first-of-a-kind pooling point infrastructure, is in place to provide the 
physical 
backbone and switching platform to support EBS, emerging bandwidth and 
related trading operations.

Likewise, EBS has developed a superior technical and commercial platform to 
digitally deliver entertainment on-demand.  While we have terminated our 
relationship with Blockbuster because of their inability to secure content, 
we 
remain confident that EBS will be successful in independently acquiring 
content 
commitments and developing distribution partnerships for this exciting new 
business.

EBS will continue to evolve as we build upon our presence in the bandwidth and
network services market.  While the market for broadband services in the U.S. 
and globally has undergone significant change in recent months, the demand 
for 
broadband services continues to grow dramatically and EBS has the skills and 
strategy required to be successful long term.

To better focus our efforts and respond to the market, we have made some 
organizational changes to enable us to effectively execute our strategy and 
efficiently grow EBS.  These changes are outlined below and a current 
organizational chart is attached.

David Cox, formerly Managing Director of Content Origination, has been named 
Chief Commercial Officer, reporting to the EBS office of the chair.  This new 
role 
will enable David to share his broad origination expertise with the various 
EBS 
commercial teams.

Digital Content Services, formerly Content Origination, is now led by Frank 
Bay 
with Rich DiMichele and Ed Smida.  Rich will focus on the development of the 
content risk management business.

Stewart Seeligson is now leading an expanded Wholesale Origination unit 
combining 
media transport opportunities that Stewart has been developing in the 
broadcast 
industry and opportunities that Ted Seitz has been pursuing with traditional 
carriers, 
ISPs, and network service providers.  This new origination team will focus on 
executing highly structured transactions with significant value in the 
wholesale market.

John Echols now leads the Enterprise Origination unit with Jim Crowder, Matt 
Harris, 
and Brad Nebergall.  Bryan Burnett also has joined the Enterprise team from 
Enron 
North America,s Industrial Markets group.  John,s group will focus on 
intermediation 
opportunities with technology, financial, and corporate customers.

Dale Surbey has joined EBS from Enron North America to lead the Structuring 
group.  
Brad Richter will move to Jeff Donahue,s Corporate Development team to pursue 
M&A and large, structured transaction opportunities.

Joe Edwards is leading the newly formed North American middle markets group, 
reporting to Paul Racicot.

Daryl Dunbar has joined EBS as a vice president in Engineering focusing on IP 
engineering.  David Leatherwood and his team have moved to Enron Energy 
Services to develop outsourcing opportunities related to network engineering 
and construction.

We have established an impressive foundation from which to build our 
business, 
and look forward to executing on the tremendous opportunities we see in this 
rapidly evolving market.

Click here to see the new organizational chart.  








FLOOR MEETING WITH SKILLING
Join Jeff Skilling at an EBS floor meeting next Tuesday as he answers 
questions about our business and 
discusses Enron's  strategy.  The floor meeting is designed to encourage open 
communication and an 
exchange of ideas.
Date:  Tuesday, April 24
Time:  1:30 p.m.
Place:  Near EB4423D
If you wish to submit questions in advance, send them directly to Jeff by 
email or fax at 713-646-8381.

THANK YOU, EBS EMPLOYEES
To show EBS employees their appreciation for all the hard work put forth this 
quarter, Ken and Kevin 
invite you to an afternoon of entertainment and recreation at Jillian's next 
Tuesday.  Please join them at the 
entertainment complex for fun, food and activities on April 24.
Date:  Tuesday, April 24
Time:  3:00 p.m.- 6:00 p.m.
Place:  Jillian's, 7620 Katy Freeway at Silber
For those interested, a shuttle will be available.  You can catch the shuttle 
to Jillian's outside the Enron 
building on Andrews Street beginning at 2:30 p.m.  If you have any questions, 
please contact Eddie Sera 
at 3-0480.

EBS MARKET INTELLIGENCE ADDS NEW TOOLS
Market Intelligence is pleased to announce the addition of Faulkner to the 
EBS family of research products 
available to all EBS employees via wEBSource.  Faulkner FACCTs is a fully 
searchable information service 
that covers technology in the IT and communications industry segment.  FACCTs 
provides select vendor 
company profiles, company timelines, market trends, product and service 
profiles, standards information, 
and company contact information.  The Telecom Weekly, a part of FACCTs, is an 
outline of the week's 
news and events shaping the telecom marketplace with "hot" web links.  FACCTs 
can be accessed by 
selecting Faulkner from the Research menu of wEBSource.  Click here to visit 
the site now.

INTRODUCING IMPLEMENTATION LOGISTICS
The Operations and Implementation group, formerly known as Customer 
Engineering, has changed its name to 
Implementation Logistics.  "Our function and focus have not changed, just our 
name," said David Rollins, a 
director of engineering in the group, "the name Implementation Logistics more 
clearly identifies the mission 
and function of the group within Operations and Implementation."

In addition to the name change, the EC Reference - Customer Eng. database 
used for implementation 
packages and AS-BUILT drawings is now known as EBS Implementation Logistics.  
New database:  EBS Implementation Logistics >> 
Click here to read more.


EBS WELCOMES NEW EMPLOYEES
Please welcome the following new employees to EBS:





David Kaplan
April 9, 2001
Starcom voices interest, though industry remains skeptical 
Enron Media Services has piqued the interest of Starcom North America with 
its plans to 
create a futures market for buying and selling media time and space.

In a recent letter to Starcom's clients, CEO Renetta McCann said the 
Chicago-based media 
company was in talks with Enron to examine the possibility of a deal.

"Despite what has been a negative reaction thus far from the industry, we 
find Enron's plan 
intriguing," McCann wrote. "Clearly, Enron proposes breaking the rules of how 
media can be 
bought and sold."

Last year, Enron Corp., the $30 billion financial risk management company 
previously associated 
with the energy industry, created EMS to market "price-risk management" plans 
to advertisers 
and media-service companies. In addition, Houston-based Enron seeks to 
execute $1 billion in media 
buys by year's end, though a representative declined to release information 
about any possible deals.

In this volatile economy, marketers and media agencies could use Enron's 
ability to hedge the risk 
of media costs as far as five years ahead, said Edward Ondarza, a vp for EMS. 

Up to this point, the only way marketers could cushion risk is by "buying 
forward" via the upfront, 
he added. "We want to create a year-round upfront by developing a media 
exchange [between 
advertisers, media agencies and networks]," he said.

Despite Enron's pitch, Starcom has received little feedback to the letter 
from its clients, said Kevin 
Gallagher, vp and director of local investments for Starcom, which claims 
$4.3 billion in billings 
and has clients such as General Motors and Kraft. "We're always open to new 
ways of doing 
business, and we wanted to keep our clients apprised of what's going on," he 
said. "But we are 
not engaged in any business with Enron. It was and remains merely 
exploratory."

Many industry insiders remain skeptical of Enron's business model, because of 
possible legal issues 
and the novelty of the concept. But they acknowledge that eventually Enron's 
approach will become 
commonplace.

"In theory it's great, but the practice is more difficult," said Jon Mandel, 
MediaCom chief negotiating 
officer. "There are some big issues that need to be worked out."

Click here to see the article in Adweek.
Platts


In the first quarter, Enron Broadband Services transacted seven times the 
amount of bandwidth than it had in 
the previous quarter, the unit of energy giant Enron Corp. announced 
Tuesday.  

The subsidiary showed a loss of $35-million in the quarter on revenues of 
$83-million, the results being 
attributed to the buildout of its fiber network and pooling points.

President and CEO Jeffrey Skilling said the broadband unit closed 580 
transactions in the quarter, more than 
double the level of the previous quarter. More impressive was the seven-fold 
increase in transacted bandwidth 
this quarter: 43,400 Terabytes versus 6,005 Terabytes in the fourth quarter.  
Enron is &making excellent 
progress in creating a commodity market,8 Skilling said.  

Seventy new broadband customers were added in the quarter, for a total of 
120.  Of that number 70% 
of the customers are carriers or network service providers, a spokeswoman 
told BMR, adding that half of 
the deals done in the quarter were with that group.



Bandwidth intermediation/trading was the other key driver, with 580 
transactions posted during the 
quarter, a significant ramp-up from 232 reported 4Q:00 and 320 for all of 
2000. In our view, we are 
way past the question &Can bandwidth be commoditized?8 and are entering the 
period of rapid 
growth in commodity volumes which precedes the all-important emergence of 
profitability.  In the 
energy commodity markets, particularly natural gas and power in both the 
United States and 
Europe, the commodity volume growth phase lasted 1-3 years before 
profitability emerged. We 
see no reason for the bandwidth commodity market, which from a commodity 
perspective &looks, 
acts and feels8 like electricity and natural gas, to perform any differently 
from these commodities. 
We are entering Year 2 of the period of rapid volume growth. The next 
catalyst in our view, will 
be for Enron to announce a reasonably &date certain8 for profitability, much 
in the same manner 
as they did for Enron Energy Services several years ago. We think that date 
could be late 2002 
or early 2003.


By Ted Jackson
April 1, 2001 
Excerpts:

...Enron's vice president and broadband trader, Paul Racicot, says Enron 
alone could enter into 2,000 
trades this year, but some analysts don't expect volumes to reach much more 
than that in the entire market. 
And while liquidity on such major routes as Los Angeles/New York and New 
York/Miami will improve 
substantially, 2001 will likely be remembered as the year progress was made 
on issues whose resolution 
was critical to the long-term health of the market.

...Probably the best-known proposal to promote network connectivity in the 
context of the emerging 
broadband trading market is Enron's &pooling points8 initiative. These 
pooling points, or switching and 
interconnection facilities through which connections between buyers and 
sellers can be established, have 
become so controversial that Enron seems almost apologetic about its plans to 
add 14 new points this year.

&We plan on expanding the number of pooling points from 21 to 35 this year,8 
says Paul Racicot, vice 
president of bandwidth trading at Enron. &But we'll trade anywhere, though,8 
he added.

Racicot is sensitive to criticism that behind Enron's pooling points is an 
effort to control the broadband 
market information flow.  &Enron's goal is to promote connectivity, not to 
use pooling points as means 
of gaining access to information about trading flows,8 he says. &The purpose 
of pooling points is to improve 
market liquidity for broadband trading. The importance of this cannot be 
overstated. A very high degree of 
connectivity will be needed for a deep and liquid broadband-trading market to 
be established.8

According to Racicot, connectivity will develop rapidly this year * spurred 
not just by Enron, but also by
third-party developers.

Click here to read full text.



By Brian Santo
April 2, 2001

...Since the market is not becoming liquid quickly enough, Enron is wheeling 
and dealing to spark the 
growth of bandwidth-eating applications. That was a major impetus behind the 
company's ill-fated 
deal with Blockbuster to provide video-on-demand services, and it is part of 
the rationale behind 
a recent agreement with EBWorld.com, the online subsidiary of computer-game 
retailer Electronics 
Boutique Holdings.

EBWorld.com will soon deliver computer games on-demand from its Web site, 
using streaming technology 
from Into Networks, Enron's preferred vendor of streaming technology.

&We're trying to drive growth of bandwidth to the home to increase overall 
bandwidth use,8 says 
Michael Harris, Enron's commercial manager of software-on-demand and video 
games.

Enron's activities put cable operators who offer broadband connectivity in 
the fortuitous and fortunate 
position of having someone else promoting a market for one of their services 
without doing anything 
to promote that market themselves.

Harris says Enron is talking with &a number of broadband service providers8 
under non-disclosure agreements.

Click here to read more.

UPCOMING TRAINING
Applied Corporate Finance and Transaction Structuring
Participants will develop an understanding of deal components and how value 
is extracted from the 
deal structure.  Dimensions of deal structures are explored in detail 
including off balance sheet financing, 
how to account for revenue from deals, economic justification of projects and 
the unique challenges of 
international deals.  In addition, the participants learn about risk 
assessment and quantification as well as 
credit issues and how they are managed.  Financial leverage is discussed; 
both the upside potential and 
the downside risks.  Mastery of the seminar material is achieved through the 
application of the financial 
principals presented in the course to a number of relevant, industry-specific 
case studies. 
Dates:      May 2-3, 2001 (1 1/2 days)
       May 12-13, 2001 (1 1/2 days)
Location:  Houston, Shepherd facility
Time:       8:00 a.m. - 5:00 p.m.
Registration Link: >> 

Introduction to Bandwidth Risk Management Fundamentals
This one day course covers the basic risk management fundamentals in EBS 
bandwidth, commercial 
origination and deal structuring.  It is designed as an introduction to risk 
management fundamentals, 
and would be appropriate for individuals who do not have a comprehensive 
understanding of these 
principles.
Dates:        May 8, 2001
 Location:   Houston, Shepherd facility
Time:         8:00 a.m. - 5:00 p.m.
Registration Link: >> 

If you have any questions regarding the above courses, please contact Rita 
Ramirez.

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