Can WorldCom debacle cripple the 'Net?
- By John K. Waters
Fears that WorldCom's meltdown might cripple the Internet--even shut it down
completely--were spreading like an Arizona forest fire last week. The reason:
among the company’s assets is UUNet, which carries a huge share of the world’s
Internet traffic, including about 70 percent of all e-mail messages sent within
the U.S. and approximately half of all e-mails worldwide. The company also owns
MCI, the second-largest long-distance provider in the U.S. But even if WorldCom
declares bankruptcy, the company’s chief says that no one will be throwing the
''off'' switch on the 'Net.
New WorldCom CEO, John Sidgmore, promoted to the post just before the company
revealed two months ago that earnings were improperly inflated by close to $4
billion, insisted at a recent press conference that UUNet will continue
operating regardless of the fate of its parent company. Speaking to reporters at
the National Press Club in Washington, D.C. last week, Sidgmore said that he saw
no significant chance of the UUNet network going dark under any circumstance.
''I am as confident as I can be that customers are not going to wake up and not
have service,'' he said. ''I really just don’t believe that’s possible.''
Menlo Park, CA-based bankruptcy attorney T. Michael Turner predicts that
WorldCom's troubles won't have much effect on the Internet. ''[WorldCom] has a
lot of valuable assets,'' Turner told e-ADT, and normally, creditors are not
going to trash something if they can get more money by keeping the asset intact
and valuable. In other words, everyone would seem to have a common interest in
keeping the thing alive as an ongoing concern, so as to maximize their own
economic interest. And this is likely to be the case in or out of bankruptcy.
Turner expects that either WorldCom will come up with a plan that will permit
the company to continue to operate its systems, or the company's assets will be
sold intact to someone who will keep the systems up and running.
Virginia-based UUNet (UNIX to UNIX Network) Technologies, founded in 1987, is
said to be the first commercial Internet service provider, first offering e-mail
and news services. It quickly grew into a full-fledged service organization,
with dial-up services, leased-line accounts and archive space for files and Web
pages. In 1996, UUNET was acquired by MFS Communications, which was acquired
later that year by WorldCom. At UUNet prior to the acquisition, Sidgmore is
credited with building the firm into a major Internet access player and for its
sale to WorldCom for $14 billion.
Along with his reassurances about UUNet, Sidgmore maintained that the
survival of WorldCom is a matter of national security, because of a customer
base that includes key federal government agencies: the defense department, the
state department and the General Services Administration.
Meanwhile, WorldCom recently handed out approximately 17,000 pink slips, and
some analysts worry that layoffs could lead to service problems resulting from a
dearth of network maintenance engineers. ''Other [companies] will need to
scramble to pick up the WorldCom business,'' wrote Yankee Group analyst Eileen
Eastman in a recent report, ''but serious hiccups may occur in service
continuity during this process.''
John K. Waters is a freelance writer based in Silicon Valley. He can be reached