Consumer FAQ

How big is WorldCom in the Long Distance market?

An estimated 30% of consumer long distance and 50% of corporate communications flows through the WorldCom network at some point in any phone call in the United States. MCI has approximately 20 million long distance subscribers, second only to AT&T.

If WorldCom declares bankruptcy, will I still have service?

Even if WorldCom declares bankruptcy, MCI will still be able to provide long distance service while it reorganizes. If bankruptcy reorganization fails, it will have to give the FCC a 30 day warning before cutting any service. This will give consumers time to find another long distance carrier.

Should I expect to see immediate changes in my MCI service?

Possibly. WorldCom has already laid off 3,700 workers earlier this year and is in the process of terminating 17,000 more. This will be over 20% of its workforce and there is speculation it may effect MCI customer service.

What will this do to long distance rates?

Over the years, aggressive competition from numerous carriers has driven down long distance rates. However, over the past 2 years, several telecom companies have struggled financially or filed for bankruptcy. A shakeout in carriers may provide an opportunity for the remaining large carriers to increase consumer rates and fees. Consumers will have to shop around and cut through the confusion of rates and fees to find plans with the greatest savings. SaveOnPhone.com has been analyzing the industry for over 4 years. It provides and unbiased review and scoring system of carriers with the lowest rates and fees. Its rate calculator instantly ranks the lowest rate plans based on individual calling needs. Discount carriers provide rates as low as 3.9 cents per minute.

What is going on in the telecommunications industry?

The problems began with the 1996 Telecommunications Act which was supposed to open the door for competition. It also opened the door for the problems that are coming out today. The law let long distance companies and Bells compete in each other's markets. Hundreds of competitors sprang up, borrowing heavily to finance their growth. Many of these have filed bankruptcy. FCC Chairman Michael Powell says the FCC may have made a mistake by encouraging the formation of these competitors without realizing how few would be able to survive. He said one way out for the industry could be a major consolidation such as the defense industry went through in the 1990's. He even suggested his agency would consider allowing a Baby Bell to take over WorldCom. During the race to borrow and grow, telecommunications companies overbuilt capacity. Currently only 10% of the 39 million miles of fiber-optic cables stretched out under the US are in use.

Will this also affect my internet service?

Less attention has been given to WorldCom's internet service, UUNet. UUNet handles nearly 50 percent of U.S. Internet traffic, including a majority of e-mails sent within the United States and around the world. The potential of the loss of UUNet is disastrous and analysts predict that governments and companies wouldn't let UUNet die. Consumers will eventually see slower Web site connections, since WorldCom carries a significant percent of Internet traffic. Worldwide layoffs at WorldCom could lead to problems such as slower connections as fewer employees are available to maintain the network.