Given the new interest in MCI, I thought it would be nice to put together a timeline of this company. I think it is good way to put everything in context and how we got here. It is interesting to note that the MCI sale is happening at a time when the Bernie Ebbers is on trial for his corporate chicanery. You can read the whole lowdown in my book, Broadbandits: Inside the $750 Billion Telecom Heist.
1963: Jack Goeken and others start Communications Consultants, which would later change name to Microwave Communications, and its business model to offering two-way radio services to truckers moving along the St. Louis-Chicago corridor.
1968: Bill McGowan buys into MCI and becomes a partner in the company. His mission take own AT&T.
1983: Bernie Ebbers starts Long Distance Discount Calling (LDDC) with four investors, in a Mississippi coffee shop. The company will eventually become WorldCom
1984: AT&T loses the anti-trust case, and MCI begins to thrive.
1989: LDDS acquires publicly traded Atlanta-based long distance reseller, Advantage Companies. Bernie Ebbers will soon meet Jack Grubman.
1992: LDDS buys Texas-based Advanced Telecom for about $850 million. Scott Sullivan comes with the purchase. The unholy troika of Jack Grubman, Bernie Ebbers and Scott Sullivan are now together.
1992: McGowan dies, and leaves the company in hands of Bert Roberts, then chairman and chief executive of the company.
1994: LDDS buys IDB WorldCom for $936 million, changes name to WorldCom.
1995: WorldCom buys Williams Technology Group for $2.5 billion; total sales touch $4 billion, debt increases to $3.4 billion. Meanwhile, MCI gets involved in ill-fated ventures like 1-800-MUSIC NOW. It loses money, hand over fist.
1996: MFS Communications, which also owns UUNet is sold to WorldCom for about $14 billion. British Telecom makes a friendly bid to acquire MCI for $24 billion. It later cuts the bid to $19 billion. Congress approves Telecom Act of 1996. Telecom bubble starts.
1997: WorldCom makes a $30 billion hostile bid for MCI. Its sales are $4.5 billion versus MCI sales of $18.5 billion. Buyout frenzy breaks out; WorldCom ends up paying $37 billion for MCI. The new company is called MCI WorldCom.
1998: Drops MCI from name.
1999: WorldCom makes a $100 billion bid for Sprint. BellSouth also wants a piece of the action and makes a similar bid for Sprint.
2000: Sprint-bid helps MCI WorldCom raise another $3.2 billion in debt. WorldCom sales were $39.1 billion, while its debt topped $24.8 billion. WorldCom offers $129 billion for Sprint. Investors think it is a bad idea and punish the stock. Meanwhile bandwidth prices fall; WorldCom is mismanaged and things are going from bad to worse for WorldCom. All sorts of shenanigans are at work.
2001: WorldCom stock tanks.
2002: Bernie is fired; a few months later WorldCom files for bankruptcy protection. It is the largest bankruptcy in the corporate history.
2003: Michael Capellas takes over as the CEO, company changes name to MCI.
2004: MCI comes out of bankruptcy protection, but sales are still declining.
2005: The WorldCom trials begin. Qwest & MCI are said to be in merger talks.