WorldCom Inc.’s CEO, John Sidgmore, Monday promised a quick recovery from the company’s bankruptcy, but until that happens, end users see months of uncertainty ahead.
“Any prudent telecom manager would certainly have someone in their back pocket,” said Bill Moore, the president of the Communications Managers Association (CMA) and the telecommunications manager at the Museum of Modern Art in New York. The CMA, which represents large end users, intends to advise its members to be ready for anything.
“I think the best course of action right now is to watch the situation very closely, but be prepared to move quickly,” Moore said.
End users should “hold the initial conversations with some other providers” as well as see whether they have adequate backup service in place, said Moore. “So if the unthinkable happened you wouldn’t be left high and dry.”
Some end users are already heeding that advice.
“In short, we’re going out to the market to get some quotes and have them in our desk drawer just in case we need them,” said Robert Rosati, CIO at Werner Co., a ladder manufacturer in Greenville, Pa.
Rosati said he’s concerned about WorldCom’s ability to deliver services. “Employees can lose focus” when their company is in disarray, he said.
The bankruptcy filing has made Henry Reitinger, CIO of the Ceres Group Inc., a Cleveland-based insurance company, less confident in WorldCom’s future, but he said it’s too soon to tell what the impact of bankruptcy will be.
The next few months will be critical, said Reitinger. “I’m not worried about what’s going to happen tomorrow, I’m more worried about what’s going to happen two or three months from now,” he said.
But WorldCom’s decision to file for Chapter 11 bankruptcy protection will make it difficult for end users with contracts to switch providers.
In bankruptcy, there is an automatic stay, and neither customers nor creditors can walk away from the company at this point unless WorldCom service gets so bad it constitutes a breach of their contract, said Colleen Boothby, an attorney and telecommunications expert at the law firm Levine, Blaszak, Block & Boothby LLP in Washington.
However, bankruptcy restrictions are “why this network is not going dark,” said Boothby. It’s also why the company was able to get financing, since Worldcom’s customer stream won’t be disturbed as long as the company continues to provide service, she said.
