Bernie Ebbers

Lynn Jeter is a person to start with. “Disconnected” (2003), her book on the Ebbers and the Worldcom failure, is a very basic recital of the facts. It is like a university thesis by someone with good intentions but no experience, insight, or particular writing skill. It is just a collection of published clippings in book form. It contains basic, published, financial information on an annual basis. It has been fact-checked.

This, written around the same time, is descriptive. “Arrogant and pompous” is a simple and informative, and Ms. Jeter should know.

There isn’t a ton on the web, so “Broadbandits” (2003) is next. Now we are getting closer. There is a chapter titled “Bernie’s Failed Vision.”

Bernie was canned in 2002, three months later the company went bankrupt, and he went to jail permanently in 2006. The company was formed in 1983 but Ebbers was not intimately involved as ceo until the mid 80’s. For the first decade Worldcom (LDDS) grew by acquisition as a long distance carrier. Everything changed in the mid 90’s with the internet. In 1996 Worldcom acquired UUNet and John Sidgemore.

Per Richard Thornborough some 11 of 13 quarters prior to the bankruptcy were tainted by accounting fraud. But it was not this, or rather just this, that brought Worldcom down.

There was logic behind the strategy at first: own the lines rather than lease them to to cut costs and build scale. It made sense in the early days of telecom. The scale included end to end control. But as everything became faster and smaller, not to mention wireless and overcapacity, it was doomed. The strategy, which was really just a ponzi scheme, was doomed when the market shifted.

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