Time to end the MCI saga

As MCI struggles to emerge from Chapter 11  and regain the confidence of its customers, it seems as if every procedural business step forward is followed by a new revelation. The latest is that MCI might have accounted for inter-carrier calls incorrectly, dodging payments to both regional Bell operating companies and interexchange carrier competitors. Some press reports say the total amount involved could reach billions of dollars.

We know what to do with individuals who break the law: Prosecute and jail them. MCI’s proving that we don’t quite know what to do with a company that breaks the law. Companies, after all, are not living organisms but simply collections of employees, stockholders and real estate. Even if all the charges levied against MCI are true, did all the workers know about the foibles? Probably not, so jailing the whole company doesn’t seem logical.

If we agree that we’re not going to put “MCI” in jail, then what are we going to do? Some competitors have argued that MCI should be liquidated because letting it resume operation cleaned of debt would “reward” it for its misdeeds. Some want hefty fines levied. There’s a range of options that all reduce to “kill the company” in some way or another. So should we kill MCI by liquidating it? At the very beginning of this saga of revelations last year, I thought we should do just that. Now it’s too late.

There are thousands of secretaries, salespeople and others working at MCI today.The number who might have known about any company irregularities is minuscule. Forcing MCI to liquidate will, perhaps, hurt a few of those who were responsible and a lot of everyday people who did nothing wrong. We just agreed that we can’t jail them for simply having worked at a company that some want to characterize as a criminal enterprise. Can we then count them unemployed for that same sin?

What about the auditors and regulators who were supposed to watch over this whole process? What about the business press that reported on glowing growth during the very period when accusers say the company was cheating on its inter-carrier accounting? Surely these people had at least as much responsibility for the problems at MCI as the average MCI worker did. How does liquidating MCI, or withdrawing government contracts to effectively force a failure of the company, deal with these overseers?

Then there are the customers. All of MCI’s detractors/competitors are eager to see them reapportioned among the survivors – including them, of course. Maybe this would be healthy for the remaining players, but it’s kind of hard on the users of MCI services. How will each of the users, each of the networks, be transitioned to another carrier? Imagine a liquidated MCI, with lines and switches bought at fire sale prices. What happens to the traffic those elements carried, and how long will it take to eliminate the disruption in service that this liquidation creates? To protect customers, we’d almost have to sell MCI intact, leaving the buyer to continue to fulfill customer contracts.

And who benefits, then? If MCI’s operation was, as alleged, created in part by criminal behavior, do we decriminalize it by selling it off? If AT&T or SBC or Verizon acquires MCI, will they then acquire the criminal and civil liability for future disclosures of wrongdoing? The survivors would acquire the same assets MCI now has. If they’re tainted for MCI, they’re tainted for everyone else. You can’t launder companies.

We’re at the point where we’ve let the MCI deal play out to the very edge of rehabilitation. We’ve accepted the past sins we’ve known about. We should accept this one, too. We’ve come too far – but in particular MCI employees and customers have come too far – to decide that one more accusation will break the back of MCI’s emergence.

Continue to investigate. Punish the guilty through due process. Let the innocent get back to work.