WorldCom has refused to comment on a report in The Wall Street Journal Friday saying the bankrupt U.S. telecommunications carrier is planning to chance its name to MCI.
"We're declining to comment on speculation," a WorldCom spokeswoman said Friday.
Meanwhile, often-quoted telecommunications analyst Jeff Kagan said the name change would come as no big surprise. WorldCom acquired MCI Communications in 1998, and Kagan said the name change could help the company distance itself from a fraud scandal revealed in June.
"This was the most widely expected secret ever in the telecom industry," Kagan said in an e-mail. "After the shock and awe of their fraud and scandal, and after they filed for bankruptcy, and announced their intention to emerge, it's been almost a foregone conclusion that WorldCom would change it's name, and probably change it to MCI. It was never a question of IF to me, it was always a question of WHEN."
WorldCom needed to put the fraud issue behind it before going forward with a name change, Kagan said. "If they are doing this, it may signal that the bad news is behind them and they can get on with the business of rebuilding," he added. "It's a good move. MCI still has a history and a magic with the public and will mean a helluva lot to all the old MCI-ers who never quite felt comfortable with the change to WorldCom anyway."
The company could change its name as early as next week, when WorldCom files its reorganization plan with the U.S. Bankruptcy Court for the Southern District of New York, The Wall Street Journal said. WorldCom hopes to distance itself from its continuing accounting fraud, which could total as much as $11 billion, according to WSJ's sources.
The revelation of fraud in June helped push WorldCom into the largest Chapter 11 bankruptcy court proceedings in U.S. corporate history.