Telecom's Cowboy Revolutionary

We have a hunch that Bill McGowan is smiling from his perch in cyberheaven today. WorldCom Inc. founder Bernard Ebbers is sticking it to the mandarins of telecom the same way McGowan used to goad the monopolists of communications when he was alive. And Ebbers is even doing it by bidding for MCI Communications, the company McGowan founded and which became the first real competitor to AT&T. Of course, McGowan used junk bonds to finance the launch of MCI, but he has to be amused at Ebbers' use of the junk bonds of the '90s, high-octane stock--WorldCom trades at 90 times earnings--to do his deal.

Ebbers, a former gym teacher, has come out of little Jackson, Miss., far from the center of the big-time telecom game, to do what AT&T and the Baby Bells have not been able to do--put together a one-stop collection of communications services to sell to Corporate America. Ebbers has local, long-distance, fiber-optic, satellite, undersea, and Internet services to sell to companies around the country. For all their political power and wealth, none of the Bells or AT&T have been able to accomplish that. Just as important, Ebbers has positioned WorldCom to take advantage of the integration of all these services into one steady stream of digitalized data flowing through the Internet that will take place sometime early in the 21st century.

Ebbers has done what the 1996 Telecommunications Act was supposed to do--and didn't. With MCI and his collection of communication assets, he can pry open the still-closed local telephone markets of the Baby Bells while giving AT&T a real run for its money in long distance. He leaves the government bureaucrats in the FCC flat-footed by his dash and daring. And he shows up congressional legislators who labored long and hard (often under the sway of telecom lobbyists) to legislate change. The moral to this tale is that in a world of fast-changing technology, reality often outruns regulation with amazing speed. There are times during fast technological change when the only appropriate government policy is to get out of the way of the marketplace.