• United States
IDG Enterprise Consulting Director

There’s no escaping networking

Aug 15, 20035 mins
Data CenterFinancial Services Industry

There’s no place like home. There’s no place like home. There’s no place like home.Dorothy, in “The Wizard of Oz”

Dear Vorticians,

I’ve clicked my heels three times and returned from a couple of weeks lakeside in Maine, where there are no Munchkins, except of the Dunkin’ Donuts variety. It’s difficult to remain worked up about the issues of the world – the networked world and the whole big, round globe – when you’re listening to the loons and looking out at the mountains across the water.

But you never really escape, no matter where you go. For instance, stopping with my clan to get ice cream at the Gazebo in Bridgton, Maine, I found myself standing in line behind Frank Ingari, former CEO of Shiva and Wheelhouse. It’s a small world after all (but let’s hope to all the powers above that Disney doesn’t turn that ride into another movie).

Also, I sat on the dock one morning and read about the new allegations against the former WorldCom – now MCI – and new demands that the company be, at the least, barred from doing business with the government and, at worse, broken up and sold off. Rivals, led by AT&T say they have proof that WorldCom avoided paying millions in access fees to other carriers by routing calls in all sorts of, let’s say, unusual ways. On top of that, the U.S. General Services Administration has suspended any new business with MCI because it says the company “lacks necessary internal controls and ethics.”

All of this has reinvigorated a debate that started months ago: Was WorldCom’s fraud confined to just the top executives of the company and is WorldCom paying a tough enough price for its crimes?

For example, at Vortex ’03, Verizon Vice Chairman Larry Babbio spoke moments after the government announced it was fining MCI $500 million (an amount that was subsequently increased) for its egregious accounting transgressions. Babbio expressed outrage, saying the former WorldCom was a criminal enterprise built by deception that the government ought to break up, distributing its assets to other players in the industry. Instead, MCI would waltz out of bankruptcy free of debt and more threatening to rivals.

Verizon made quite a bit of let’s-break-up-MCI noise this spring, but things seemed to have quieted down for new MCI CEO Michael Capellas (formerly of Compaq) until the access fraud allegations came to light. Now, the ethics and integrity of MCI are squarely in the spotlight once again.

My fellow columnists at Network World were split on this issue this week. Mark Gibbs, in a column titled “Rotten to the Core,” opined that the problems at MCI go well beyond the executive suite.

Gibbs wrote: “Can MCI be salvaged? I use the term salvage because there’s so much rot in the body of the company that words like ‘redeem’ or ‘cure’ are not applicable. The problem is that corporate personalities, just like the personalities of individual humans, are hard to change. … Corporations get used to providing bad service (a peculiar talent of telecom companies), taking shortcuts, padding bills – and that becomes standard procedure.”


His column drew sharp responses from readers. Some current MCI employees lambasted him for lumping them in with greedy executives like Bernie Ebbers. How dare he impugn the integrity of the many because of the sins of the few? Others said WorldCom’s culture was, indeed, fast and loose and changing the ingrained habits of the company would be difficult.

Perhaps the saddest response was from a non-MCI employee who said, in essence, that Gibbs’ response was an exercise in ivory tower thinking by a pundit with more job security than his readers. With the employment market so bad, the writer stated, a manager’s first responsibility is keeping his family fed and clothed, not whistle-blowing on his employer.

For her part, columnist Johna Till Johnson, in the piece “Latest MCI ‘scandal’ isn’t what it appears to be,” said that all the fuss over the access fraud is just smoke-blowing by competitors who want to create more F.U.D. about MCI. She called the access charge rules “Byzantine” and said that exploiting them is a “parlor game” among carriers. The blame for WorldCom’s financial fraud rests with a few corrupt individuals. The rest of the organization is made up of honest, hard-working folks who, like WorldCom’s investors, have already paid a high enough price for the company’s errors.

“I’m not defending MCI,” Johnson wrote, “and I’m emphatically not defending its former managers, particularly ex-CEO Bernie Ebbers and ex-CFO Scott Sullivan. (I’d like to see them both put away for years.) But using the current round of fraud charges as a justification to dissolve MCI is like taking a blowtorch to a mosquito – it’ll probably work, but the collateral damage will be high.” (

I side with Johnson here. It’s difficult for me to understand how breaking up MCI would serve anyone besides its competitors. The thousands of honest employees at MCI – as well as MCI’s customers – deserve a chance for the company to be redeemed. And it galls me to hear companies like Verizon throwing stones from the front steps of their glass houses, demanding that MCI be smashed to pieces. Ask any CLEC executive about the integrity of the incumbent telephone companies, which did everything in their power to snuff out their new rivals.

Where do you stand? Is MCI redeemable or should the company pay the ultimate price? Drop me your thoughts at

Thanks. It’s nice to be back.