Who owns mci
The company made a spate of acquisitions in the s, but proved unable to fully digest MCI. But in the end, the network integration was a mess and WorldCom ended up spending way too much to get it to work. Things reached a climax in , when regulators rebuffed stock-rich WorldCom in a bid to buy MCI competitor Sprint , the third-largest long-distance carrier in the United States.
By , as profits and revenues plummeted , accounting irregularities were discovered on WorldCom's books. Amid scandal, Ebbers and several other executives were forced to leave the company. Ebbers is currently on trial in New York City on fraud charges. In the summer of , WorldCom filed for the largest bankruptcy protection in U. Last year, under new management , the company emerged from bankruptcy and changed its name back to MCI. Since its emergence, it has had to reconcile its scandalous past with its hopes for the future.
And in January the U. All the senior executives and board members from the reign of former Chief Executive Officer Bernard Ebbers are gone. Five executives, including former Chief Financial Officer Scott Sullivan, have pleaded guilty to federal charges for their role in the accounting scandal. Ebbers has pleaded innocent to charges including conspiracy and securities fraud. IE 11 is not supported. For an optimal experience visit our site on another browser.
The last thing competitive local exchange carriers want is to be saddled with the costs of supporting ubiquitous access to their networks. WorldCom, which is already one of the largest CLECs owing to its acquisitions of formerly independent local carriers MFS and Brooks Fiber, now aims to extend this exclusionary strategy to an altogether new level — through its takeover of MCI. For large business users, the arrival of the CLECs indicates that significant competition in local markets already exists today, as diverse commentators have recently underlined.
Or will the strategy behind the takeover work to jeopardize inclusive access to telecommunications? MCI, the second largest U.
MCI business services, providing telephone, Internet, and data communications to companies, furnish fully two-thirds of its long-distance revenue — which in turn provide nine-tenths of overall corporate revenue. The remainder comes from an information technology business aimed exclusively at corporate and governmental customers. The company also accrued significant losses, which acquired significance in the decision ultimately not to merge with British Telecom.
This objective is not confined to local service markets. Using targeted prime-time TV ad buys, it will try to reach well-educated professionals, ages 30 to A WorldCom takeover of MCI will only intensify this strategic shift to serve business and well-off residential subscribers across all service markets. Let us concede that a buildout of CLEC networks beyond the 1.
Let us even stipulate that this system-development effort will move beyond business markets into residential service. Nonetheless, absent regulatory intervention, such a prospective buildout will only extend the exclusionary logic that has driven CLEC system development from the outset.
WorldCom is focused on business services, and may sell its consumer business to help refill its coffers and make up for the inflated purchase price it paid for MCI. This amounts to the consolidation of U. By integrating these local networks with its long-distance facilities and, specifically, with its tiered Internet services, the merger threatens to establish a freestanding infrastructure that is largely separate from the inclusive public-switched network that currently predominates.
Systematically cherry-picking in favor of high-volume users, MCI-WorldCom seeks to establish a premium network for those able to pay.
Meanwhile, the existing public network languishes. In , the U. It also cut nearly 14, jobs from its payroll since , which left it unable to cope with the swelling demand for phone lines in and And there were , customers whose phones remained out of service for more than 24 hours during the quarter — a A quick look at one final issue — the changing status of labor relations in the telecommunications industry — further underlines that a WorldCom takeover of MCI would make for poor social policy.
Downsizing of unionized industry units took several forms. The long-distance unit of Sprint set up a San Francisco-based telemarketing subsidiary, relying on Latino workers, to market its long-distance service to the Spanish-speaking community. Intolerant in principle of collective bargaining rights, Sprint simply shut down its San Francisco operation, laying off workers one week before a scheduled union election.
Weeks before Christmas in , MCI had already demonstrated an identical resolve. Workers in its Southfield, Mich. Under the pretext of a nationwide cost-cutting program, on December 3, MCI terminated approximately Southfield employees with no notice.
The extent of their success will likely become visible only when the economy enters its next recessionary phase. This is not a happy prospect if the goal is to preserve a high-wage economy in the United States. The premium services that it would target at high-volume business users would come at the expense of residential services.
Can the United States afford to risk the creation of a new telecommunications monopoly as the 21st century dawns? Regulators must step up to address this question now and stop the proposed merger before a merged MCI-WorldCom can consolidate its prospective market dominance into a monopoly position. GPO, esp. Mueller Jr. Kelley, , pp. Patrick McGeehan, ibid. John J. Telecom A. Bernard Ebbers stated, at the onset of the WorldCom offer, that the projected cost savings were unlikely to include substantial job cuts.
John V. David S. Reed E. Lee W. McKnight and Joseph P. Bailey, eds. Cambridge: MIT Press, Terzah Ewing and Stephanie N. Thomas K. Werbach, Digital Tornado, p. David F. Weiman and Richard C. Also see Mueller, Universal Service , pp. Claude S. Huber, Washington, D. GPO, Jan. Heather Burnett Gold, president. Peter W. Huber, Michael K.
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