Enron considers offer for bandwidth business

Jarvis Entertainment will receive an answer to its acquisition plans on Friday, and if successful would become owner of all EBS assets, including its bandwidth trading operation. It is believed that Jarvis Entertainment is the only company bidding for the assets.EBS has an 18,000-mile fibre network covering major US cities, and was once at the forefront of the bandwidth trading market. But its financial position worsened throughout 2001 – long before Enron’s financial woes came to light.

In Q2 2001, EBS posted a loss of $102 million compared with $8 million in the corresponding period of 2001. And by the third quarter it had made a loss of $357 million, bringing the loss for the first three quarters of 2001 to $494 million. The number of bandwidth trades also fell from 765 in the second quarter of 2001 to 405 in the third quarter.

John Jarvis, chairman and chief executive of Jeg, told RiskNews that he is confident that there is a future for bandwidth trading, despite bandwidth participants El Paso and Reliant cutting staff in their bandwidth divisions late last year.

Jarvis, a colourful character, added that the talks with Enron are progressing well but that he feels “caught in a minefield” of federal agencies investigating Enron. “I just want to appease everyone and get Enron’s people back to work,” said Jarvis, although he declined to say how many bandwidth traders he would employ.