WorldCom bankruptcy should not mean any sudden problems for customers

Sunday, July 21st 2002, 12:00 am
By: News On 6

JACKSON, Miss. (AP) _ WorldCom Inc.'s MCI long-distance customers and Internet users aren't going to suffer immediate service disruptions as a result of the company's bankruptcy filing, officials and analysts said Sunday.

Competitors, including Sprint, AT&T and SBC Communications, have said they were receiving more sales inquiries since WorldCom revealed it had hidden $3.8 billion in operating expenses, sending the already spiraling company into crisis.

A bankruptcy reorganization, while giving Clinton, Miss.-based WorldCom time to restructure its hefty debt, also is the kind of negative publicity that could scare more customers away.

But an analyst said the bankruptcy filing won't affect customers in the short term.

``FCC rules say a company would have to give at least 30 days notice before shutting down a network,'' said Drake Johnstone, an analyst with Davenport & Co. in Richmond, Va.

Johnstone noted that the Federal Communications Commission has said even more notice will be given in WorldCom's case.

``We're not going to see a situation where they turn the lights out. The company will continue to operate.''

Sidgmore said Sunday the bankruptcy should have no effect on the company's customers _ from long-distance users to users of the Internet traffic transported by WorldCom's UUNET, which accounts for 29 percent of the capacity on the nation's busiest Web routes.

``At the end of the day, this really will be business as usual,'' Sidgmore said. ``We don't think that there will be any significant impact on the employees and vendors, for that matter, and we should have plenty of cash to make it.''

U.S. bankruptcy laws tend to allow big businesses like WorldCom afloat long enough to rearrange their finances or sell off businesses and assets in an orderly manner.

A bigger concern could be if cutbacks the company is making to save money, including the layoff of 17,000 workers, might result in poorer service or even temporary outages.