ders for T1 ports; given the long lead times that they worked on, back- logs were reportedly over a year long. This led manufacturers, such as Lucent and Nortel, to increase capacity, which of course worsened the oversupply when the boom ended. Surplus Gear Met Demand A final feature of the meltdown was the mass of unsold equipment left over from the boom years. Surpluses continued to build up as CLECs, ISP, dotcoms, cable overbuilders, and other companies failed. Routers and servers became available for pennies on the dollar. Most of this hardware was unused, new in the box; slightly used equipment was even cheaper. Of course one company's bad news is another's good news. Survivors and start-ups could build "eBay-powered networks" for a fraction of 1999's costs. But for the manufacturing sector, it was adding insult to injury. This was severe for router leader Cisco Systems, but it had the resources to weather the storm, albeit slightly slimmed down. The company reportedly spent billions of dollars purchasing back inventory in order to crush it, or at least to limit its impact on the surplus-gear market. This apparently helped at the high end of the market, where a relatively small number of ISPs and telecom carriers were the potential buyers and sellers, but the midrange remained saturated with available products. The telephone switch business did not face the same surplus problem but for a different reason. Telephone switches are subject to strict regulatory require- ments, which lead to regular software updates. Lucent and Nortel licensed their switch software on a nontransferable basis. Most of the cost of a new 5ESS was software; a used 5ESS would require the same license fees as a used one. Because new switches from vendors such as Sonus and Taqua could be had for a lower cost than relicensing alone, the market price for used legacy telephone switches fell to approximately zero, and few were sold. A brisk trade remained in specialty gear such as Excel switches, which often depended on third-party software,