MCI WorldCom issues its own brand of apology

Anyone wondering how chief execs get to be chief execs should look no further than MCI WorldCom's CEO Bernard Ebbers.

Reporters who dialed in to the company's conference call on Monday -- Ebbers' first meeting with reporters since MCI's disastrous 10-day network outage -- found a guy in charge who wondered what all the fuss was about. The real problem wasn't MCI, it was with Lucent Technologies, which doesn't know how to run a company, anyway, Ebbers pointed out. And as for the bottom-line impact of giving away 20 free days of service to the 3,000 customers affected by the outage, the cost, Ebbers said, was negligible; likely to produce only a "very, very slight downtick" in revenue.

But reporters and the analysts they talked to saw things differently. Ebbers' efforts at apologies -- he reported that MCI WorldCom is busy penning letters to affected customers -- were too little too late, considering that the problem first surfaced August 5, according to analysts and customers interviewed by the Washington Post's Sarah Schafer. "This thing has gone from unbelievable to unbearable to now unforgivable," Gartner Group analyst Ken McGee told Schafer. "They were not nearly as forthcoming with information as they should have been," said Yankee Group analyst Jennifer Pigg.

The New York Times' Seth Schiesel contrasted MCI's leisurely, 10-day approach to the outage with the 24-hour frenzy that ended AT&T's own blackout a year ago. Then again, MCI WorldCom had a willing scapegoat. Lucent Technologies makes hundreds of millions of dollars off MCI WorldCom every year, and when its uber-customer told it to assume the position, Lucent did. Schiesel wrote that Ebbers lashed out at Lucent during the conference call, questioning the company's management about its top-dollar acquisition of Ascend Communications. "Communications carriers generally refuse to discuss their vendors at all," Schiesel pointed out. The real question, he added, is why MCI WorldCom waited 10 days to shut down the system and reload an older but more stable software version.

The shutdown left tiny ISPs going to such primitive lengths as telephoning customers to explain the outage and offering a month's free service, according to a related Times article by Matt Richtel. An MCI WorldCom spokeswoman told Richtel the partial outage was "unsatisfactory" and the company expected it would take "several weeks" to regain the trust of its customers. But Forrester Research senior analyst Jeanne Schaff speculated that "most" of the stranded Internet service providers will soon be looking elsewhere for Net connectivity.

CBS MarketWatch's Jeffry Bartash saw the disruptions as smash-ups that can be expected on newfangled data-switching highways. MCI WorldCom is the second-largest US long-distance provider, behind AT&T. So when it has trouble, so do lots of others. MCI WorldCom built its network in part by acquisitions, so while the carrier is trying to make its network more uniform, it's also been expanding during the past six months to keep up with rapidly surging demand. "The carrier is apparently having some difficulty handling those two tasks simultaneously," wrote Bartash.

Ebbers would probably agree.

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