Love or hate MCI: deal with it

From the mind of a two-way radio dealer in 1963, MCI went on to challenge AT&T’s 20th century monopoly on American communications and — for better or worse — helped create the communications market of the 21st century.

Jack Goeken was a manufacturer’s rep selling two-way radios for General Electric out of an office in Springfield, Illinois, when he and four others devised a scheme to sell more radios. They could build microwave towers along Route 66 and sell radios to truck drivers and dispatchers. After a protracted fight, MCI prevailed against AT&T and other phone companies and was granted its license to establish towers between St. Louis and Chicago in 1969. Bill McGowan, a financial genius who joined in 1968, helped Goeken build a national network by acquiring leases on land to build the towers.

AT&T fought every MCI move. In 1974, MCI filed a civil suit against AT&T arguing Ma Bell violated the Sherman Antitrust Act. The Justice Department also brought a suit against AT&T that year. MCI prevailed in 1980, and in 1984, Federal Judge Harold Greene broke AT&T’s control over regional telephone companies, and communications changed forever in the United States.

At the end of the 20th century, MCI built arguably the best IP backbone on the planet, mostly through acquisition. People could argue that MCI became everything it fought against in AT&T, when telco upstart WorldCom absorbed it. Then it also became a symbol of the greed and disappointment of the dot-com bust.

WorldCom has admitted to fraudulently overstating revenue by at least $9 billion. WorldCom, which is expected to emerge from bankruptcy in September, agreed to pay a $500 million fine levied by the Securities and Exchange Commission.

While trying to shake off the WorldCom name like a kid with something sticky and bad on his finger, the company defends its ethics and service record as it tries to re-brand itself as MCI once again.

That has not been easy. The company fired more than 30 executives and replaced the board of directors. But even the Gray Panthers — a senior citizens lobbying group since 1970 — jumped on MCI for allegedly pilfering or squandering some members’ retirement.

So it is no surprise that controversy followed announcements that MCI won at least a $20 million contract from the Department of Defense to provide a cellular telephone system in Baghdad, and a seven-year deal for high-speed data communications from the National Oceanic and Atmospheric Administration that has a ceiling value of $11 million.

After all, scandal-plagued companies such as Enron and Arthur Anderson have been banned from doing business with the government. But MCI says it has not received any special consideration and has an exemplary track record providing voice and data services to government.

Remember, WorldCom was the largest reseller of wireless services in the United States before it quit the wireless business in 2002 because it was bleeding red ink.

MCI is an easy company to love-to-hate, but never count MCI out. Although it may seem far-fetched at the moment, don’t be surprised when MCI rolls out a push-to-talk service. After all, MCI is an old radio company and a survivor. There are likely wireless services in MCI’s future, like it or not.