Worldcom - not this is NOT good news

crawler · 31-07-2002 12:39pm #1

The Wall Street Journal reports that a top US telecommunications regulator has said that the government may be unable to prevent WorldCom from abruptly terminating its Internet services. The comment by Federal Communication Commission chairman Michael Powell came at a hearing of the Senate Commerce Committee called to explore the impact on telecom services of the bankruptcy filings and accounting scandals in the sector. Powell assured legislators he could force WorldCom to continue providing phone services to customers, but he was unsure if he had the legal authority to stop the company from shutting down its UUNET subsidiary's Internet backbone. Powell's remarks prompted calls in Congress for sweeping legislation to expand the FCC's authority.

Fallschirmjager · 31-07-2002 12:56pm

jesus, there is no way, no way the states will let this happen and worldcom woudl be a double pariah if they did this..

i hope

dahamsta · 31-07-2002 1:43pm

It's not particularly bad news either though, since Worldcom are pretty likely to pull out of chapter 11 (at least in my view). Plus of course there's a good deal of separation between WC and UU.

adam

spongebob · 31-07-2002 1:55pm

Worldcom have $2B of debtor finance to get them thru + some of their own cash + incoming bills.

Kpnqwest failed because the banks were preferred creditor, thereby negating the deire by anyone else to supply any finance whatsoever. Chapter 11 is more lenient and attempts to enure the continuity of the entity.

M

vinnyfitz · 31-07-2002 2:04pm

It sounds like the regulator is simply posturing - in search of more powers.

crawler · 31-07-2002 2:06pm

I cant see WCom going under - let alone UUnet....to much at stake for all.

SkepticOne · 31-07-2002 2:09pm

I think, most likely Worldcom's infrastructure will be bought up by competitors where needed, however the problem will be lack of competition forcing up prices.

For us in Ireland, though, backbone costs are the least of our concerns. Phone bills are the big deal here.

spongebob · 31-07-2002 2:09pm

agree with Vinny's reading of the situatin.

crawler · 31-07-2002 2:12pm

Completely Agree SkepticOne but it's the old knock on effect - if IP transit costs increase guess what will happen next - also it will increase the cost of leased lines to other potential ISP's - you cant view these things in isolation.

SkepticOne · 31-07-2002 2:54pm

Originally posted by crawler
Completely Agree SkepticOne but it's the old knock on effect - if IP transit costs increase guess what will happen next - also it will increase the cost of leased lines to other potential ISP's - you cant view these things in isolation.

So you reckon it will have a minor impact here?

crawler · 31-07-2002 3:06pm

Tusk! the old give 'em a bit of rope and let 'em hang themselves! I am guessing you know the answer to these questions.....look at INEX and who peers there.....then look at LINX and who peers there - look at who provides the IP transit to the US and look at the likes of AC1 & AC2.

I dont thnk the impact would be dramatic but it gives the struggling Telcos ( which is every Telco ) an excuse to hype rates , which let's be honest on the global market are being sold below cost anyway....

In isolation a Wcom death may not be hugely upsetting but a Wcom , GC and Quest death would!

Worldcom - not this is NOT good news

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