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MCI Rewrote The Rulebook
Washington Post ^ | 2/15/05 | Caroline E. Mayer

Posted on 02/15/2005 7:21:11 AM PST by advance_copy

The fighting entrepreneurial spirit was a hallmark of the man who helped found MCI -- William G. McGowan. McGowan, a financier who was brought in to save the nearly bankrupt MCI Communications Corp., in 1968 was a scrappy fighter determined to take on the giant AT&T, which at that time had monopoly control over all telephone service in the United States.

Early in his bid to offer long-distance service, McGowan concluded that the company needed to be in Washington, where it could monitor its battles in the courts and Congress and before the Federal Communications Commission. Until then, the only telecommunications presence in the area was from Comsat International Inc. and Intelsat Ltd., government-created satellite firms.

(Excerpt) Read more at washingtonpost.com ...


TOPICS: Business/Economy; Technical
KEYWORDS: ebbers; mabell; mci; worldcom
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This WP article does not even mention WorldCom or Bernie Ebbers; it completely misses the real story. From experience, MCI was an outstanding American enterprise. It played a key role in Reagan's breaking up the Sovietized bureaucracy that was Ma Bell. The Gipper knew government regulated telephone monopoly was an FDR socialist legacy. MCI changed that, but Ebbers ruined it in the 90s with their dot-bomb takover -- $35B in WCOM stock that turned out to be worthless. Now, one of the baby bells (all still operating like FDR's bureaus) is buying the carcass of MCI. Sad. Thank God for cable-modem and VoIP keeping at least a little competition in the sector.
1 posted on 02/15/2005 7:21:13 AM PST by advance_copy
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To: advance_copy

I was an original MCI employee back when it was called Microwave Communications Incorporated. We didn't have any switches just private lines from St.Louis to Chicago and Wash DC to New York via Philly.

I'll never forget being at the Philly 1 terminal and having Sheriff deputies knocking on the door demanding entrance to repossess equipment prior to the consent decree.

We called Worthington the General Counsel in DC to ask what we should do. His response, whatever you do don't open the door. We told the deputies under counsels advisement that we were prohibited form opening the door and they went away.

If we had let them in, MCI would have been finished....

NeverGore :^)


2 posted on 02/15/2005 7:31:25 AM PST by nevergore (“It could be that the purpose of my life is simply to serve as a warning to others.”)
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To: advance_copy

Busting up the Ma Bell did irreversible damage to America's lead in the telcom market.


3 posted on 02/15/2005 7:33:35 AM PST by Bogey78O (Hillary Clinton + Fertility pills + Scott Peterson + rowboat = Success)
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To: advance_copy
Thank God for cable-modem and VoIP keeping at least a little competition in the sector.

It's cell phones which are destroying the traditional phone companies. Both local telephone and long-distance companies are dying anachronisms, at this point. I read an article yesterday about how colleges are getting rid of their campus phone companies, because something like 90% of incoming freshmen have cell phones, and get free long distance anyway.

4 posted on 02/15/2005 7:34:42 AM PST by SedVictaCatoni (<><)
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To: nevergore

1. That is an awesome story about Philly1

2. If MaBell had her way, if it weren't for MCI, we'd still be renting our handset and paying through the nose for long distance calls.

3. The largest cell provider is Verizon (formerly, Bell Atlantic, formerly C&P Telephone, formerly AT&T -- MABELL)


5 posted on 02/15/2005 7:40:33 AM PST by advance_copy
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To: advance_copy
Reagan's breaking up the Sovietized bureaucracy that was Ma Bell. The Gipper knew ...

The settlement of the antitrust case (The Modification of Final Judgment or "MFJ" as it became known) occurred under Reagon's DoJ, but the case was actually filed under Carter.

Reagan might have approved of the anti-bureaucrarcy thrust of the break-up, but he probably had little or nothing to do with it.

In practice, it was the brain-child of Judge Greene, and it would not be fair to characterize Judge Greene as being anti-bureaucratic. The MFJ created a lot of nonsensical rules and line of business restrictions on telecommunications companies.

I'm not defending the Bells, and I'm not sure what the answer is. Some wanted a more aggressive enforcement of the UNE-P rules. Personally, I would have welcomed a further break up of the incumbent LECs, stripping the network elements out from service provision.

You are right to separate MCI from the criminal conspiracy known as WorldCom.

MCI, of course, was not all sweetness and light. The company was founded (with the encouragement of the FCC) to exploit opportunities created by regulatory inefficiencies. In the early days, they were known as a law firm with an antenna on top.

MCI could also act like a monopoly when it had the power. They were real tough in negotiating access to their Internet backbone before the merger with WorldCom.

6 posted on 02/15/2005 7:40:38 AM PST by Martin Tell (Red States Rule)
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To: advance_copy
>If MaBell had her way ... we'd still be renting our handset and paying through the nose for long distance calls

Careful what you say!
Do you really think they stopped
listening to us?!












7 posted on 02/15/2005 7:46:12 AM PST by theFIRMbss
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To: nevergore

MCI has almost always had crappy management. Just before I left there, somebody noticed that there were no outages over the holidays... gee, because nobody was doing any work! Instead of paying enough money to keep the good people and dumping the idiots they recruited from bagging groceries, their response was not to allow any work that *might* affect traffic during business hours. Retarded managers who screwed up got promoted or transferred to make somebody else's life miserable because firing an idiot butt-kisser would look like a reversal of a Custer Decision. Over 6 years I saw just about every bad management cliche there was. No surprise to me.


8 posted on 02/15/2005 7:47:37 AM PST by agitator (...And that no man might buy or sell, save he that had the mark)
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To: nevergore

wow!

whatta story.

most people don't remember the monopoly of at&t. it was illegal to hook up alien equipment to your phone line.


9 posted on 02/15/2005 7:47:43 AM PST by ken21
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To: Martin Tell
The settlement of the antitrust case (The Modification of Final Judgment or "MFJ" as it became known) occurred under Reagon's DoJ, but the case was actually filed under Carter.

The initial lawsuit was filed in 1974 by the Ford DOJ. It was the result of a 1969 Nixon administration investigation of the FDR legacy telephone monopoly. Carter continued it (he would have paid dearly if he had withdrawn it because Americans were sick of AT&T by then). But the MFJ would likely NOT have broken up the monopoly (just as the 1949 lawsuit didn't) without Reagan's DOJ. The 1982 agreement, which ended the lawsuit, between AT&T and the U.S. was a voluntary one, that Judge Greene encapsulated in the final order (MFJ).
10 posted on 02/15/2005 8:02:59 AM PST by advance_copy
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To: advance_copy
Thanks for refreshing my recollection that the antitrust suit was earlier (these suits can stretch for many years); I think it may have even started under Nixon's DoJ. There was bad blood between Nixon and AT&T going back to the 1968 campaign. The Humphrey campaign had run up a hugh (huge) telephone bill that AT&T subsequently forgave. Nixon wanted revenge and hence the antitrust lawsuit. At least that's what I heard.

The politics of the phone wars are often hard to figure. The most anti-Bell politician I was aware of was Senator Hollings (D-Disney & WorldCom). Other Dems are pro-Bell. Senator Stevens (R-Alaska) is seen as pro-Bell. John McCain has taken money from all sides. An examination of the donations reported on opensecrets.org is very interesting.

11 posted on 02/15/2005 8:18:52 AM PST by Martin Tell (Red States Rule)
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To: agitator

When were you there? Before or after Worldcom? Bad management occurs in all large corporations. However, there was a marked decline starting around 1987 when MCI became a true market force. The Entrepreneurial focus left and was replaced by a bureaucratic mess.

BTW, Bernie Ebbers was a reseller customer of mine during the early LDDS days. He would come to Atlanta to visit and sit across from me at the conference table with his cowboy boots propped up. What a piece of work he was.....

NeverGore :^)


12 posted on 02/15/2005 8:29:51 AM PST by nevergore (“It could be that the purpose of my life is simply to serve as a warning to others.”)
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To: ken21

I've got a great story about myself and Bill McGowan. If I get time later I'll add it to this thread.

NeverGore :^)


13 posted on 02/15/2005 8:33:49 AM PST by nevergore (“It could be that the purpose of my life is simply to serve as a warning to others.”)
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To: advance_copy
I found the following about the date of the antitrust suit in the debate on the 1996 Act, (from Senator Dorgan (North Dakota)):

The fact is the Department of Justice has promoted competition in the telecommunications industry under both Republican and Democratic administrations. The AT&T investigation began under the Nixon administration. The suit was filed under the Ford administration. It was pursued through the Carter administration, and it was settled during the Reagan administration. On a bipartisan basis, the Department of Justice, I think, has stood up for the interests of the American consumer, attempting to require and impose a competitive test.

14 posted on 02/15/2005 8:43:47 AM PST by Martin Tell (Red States Rule)
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To: Bogey78O; advance_copy
Busting up the Ma Bell did irreversible damage to America's lead in the telcom market.

That's a bunch of horse manure. AT&T was holding back the advance of telecommunications technology, because they were more interested in preserving their existing business structure. They even held back their own inventions. They invented ISDN and ADSL in the late sixties. ISDN didn't become widely available till the 1990s. ASDL didn't become widely available till 1999 - 2000. I was one of the first DSL customers in Corpus Christi and had to be on a waiting list to get it when it first became available. It is competition that forced new technologies to become available.

15 posted on 02/15/2005 8:46:44 AM PST by Paleo Conservative (Hey! Hey! Ho! Ho! Andrew Heyward's got to go!)
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To: advance_copy; nevergore; Bogey78O
2. If MaBell had her way, if it weren't for MCI, we'd still be renting our handset and paying through the nose for long distance calls.

In order to transmit data we'd still be required to buy Western Electric acoustically coupled 300 baud modems from Ma Bell.

16 posted on 02/15/2005 8:49:53 AM PST by Paleo Conservative (Hey! Hey! Ho! Ho! Andrew Heyward's got to go!)
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To: Martin Tell
found the following about the date of the antitrust suit in the debate on the 1996 Act, (from Senator Dorgan (North Dakota)):

I can't believe anything from Byron Dorgan. That's just DUmbocRAT spin. Carter would have been fried and served with corn on the poltical cob if he'd pulled the lawsuit because Americans were sick to death of AT&T's gouging them. That's why he let the suit stand, but it went absolutely nowhere while he was POTUS. Only with Ronald Reagan did they force the issue and give us competition and innovation that eventually produced the medium through which we FReepers can save America.
17 posted on 02/15/2005 8:58:04 AM PST by advance_copy
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To: Paleo Conservative
That's a bunch of horse manure

Well said!
18 posted on 02/15/2005 8:59:09 AM PST by advance_copy
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To: Paleo Conservative
ISDN has been around for some time, but for the longest time it was a technology in search of a market.

There used to be a joke that ISDN stood for "I still don't know." It took the growth of demand for (semi) broadband services before ISDN even achieved modest market success.

One of the problems in rolling out ISDN was that the Bell heads were scared of repeating the Picturephone fiasco of the early 60s.

To my knowledge ADSL was not developed until much later. Bellcore was working on it in the early 1990s; it was called video-on-demand at the time. Again the marketeers were wrong; they did not foresee the 'Net, and thought ADSL would be used to compete with cable.

19 posted on 02/15/2005 8:59:33 AM PST by Martin Tell (Red States Rule)
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To: advance_copy
Your comment is right on target from my experience. I left MCI not all that long after the worldcom takeover. IT was almost immediately obvious that worldcom was a criminal enterprise and I told everyone I worked with that it wasn't going to last long.

Sure enough, it only took Bernie a few years to kill what had grown from a few microwave towers to a multinational powerhouse under McGowan.

I have a hardback copy of "The History of MCI" on my bookshelf to remind myself of what it was.

20 posted on 02/15/2005 9:07:35 AM PST by zeugma (Come to the Dark Side...... We have cookies! (Made from the finest girlscouts!))
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