Report: FCC Considers Allowing A Baby Bell To Buy WorldCom

WorldCom The Wall Street Journal

FCC Chairman Michael Powell said the industry's debt-ladened condition leaves regulators little choice but to consider the merger of WorldCom and one of the local regional telecom service providers to ensure that service to customers is not disrupted.

Almost a decade ago, the U.S. government broke up the old Ma Bell local and long-distance monopoly to create an environment of fair competition among phone carriers.

More than 50 percent of Internet traffic in the United States runs over WorldCom's Uunet backbone, and some 20 million Americans rely on WorldCom's phone service.

Many mission-critical government applications also run on this network, causing alarm among government agencies, a fact WorldCom CEO John Sidgmore acknowledged last month.

WorldCom's reported accounting irregularities rocked the industry. Powell said in The Wall Street Journal article he is concerned that similar accounting irregularities will be found at other carriers.

In addition, the U.S. Attorney's Office is conducting a criminal investigation of Qwest Communications International. Qwest's accounting practices are also under investigation by the Securities and Exchange Commission as are those of Global Crossing.