x
Ethernet equipment

Light Reading's Hall of Fame: The First Five

Even in an era of telecom excess and corporate misdeeds, Bernie Ebbers stands out. His financial shenanigans not only scuttled his own company, Worldcom, but also took down two of the telecom industry's proudest franchises – MCI, first to challenge the AT&T monopoly, and UUnet, the Internet backbone pioneer.

All told, Ebbers lost $100 billion in investor dollars and cost thousands of people their jobs before being sentenced to 25 years in prison for fraud and conspiracy.

The former high school basketball coach, who always preferred boots and cowboy hats to three-piece suits, built his original fortune acquiring Best Western motels in Mississippi, then got into telecom in 1983 by borrowing money with three friends to buy the company that they renamed Long Distance Discount Service (LDDS). From the outset, Ebbers had one strategy: growth through acquisition. LDDS bought more than 60 independent telecom firms to become an 11-state operation. But Ebbers was just getting started.

He burst into the telecom spotlight in 1996 with his $12.5 billion purchase of MFS Communications, and his crowning glory was a $40 billion merger with MCI to defeat a British Telecom takeover bid. Along the way, Ebbers, who is Canadian by birth, clung to his image as a Mississippi good ol' boy who still taught Sunday School, while personally buying Canada's biggest ranch, a minor-league hockey team, a yacht builder, and vast amounts of timberland, much of it using his Worldcom stock as collateral.

After a planned Sprint merger was scuttled, the telecom bust revealed to the world that Ebbers's claims of efficient integration were largely smoke and mirrors – at one point MCI Worldcom had 55 different billing systems. Hiding all that inefficiency were accounting methods that managed to count some leasing expenses as revenue while hiding losses. Investors were unaware of how bad things were – and so, Ebbers always claimed, was he.

Next Page: Craig McCaw

Previous Page
4 of 6
Next Page
cnwedit 12/5/2012 | 4:19:45 PM
re: Light Reading's Hall of Fame: The First Five

Like all visionaries and risk-takers, McCaw also suffered some spectacular failures -- Teledesic comes to mind as his boldest vision, and biggest single failure (though maybe not as personally costly as the divorce.)

jayja 12/5/2012 | 4:19:43 PM
re: Light Reading's Hall of Fame: The First Five

I thought Don was doing pretty well in your voting.


As someone who has made a career and raised a family on his invention, I can't understand how he is not on this list. 


Though when I see Bernie Ebbers and Jacob Alexander on the list, and compare them to a gentleman of high character like Don, maybe that's not so bad.


“I'd never join a club that would allow a person like me to become a member.” - Grouch Marx


Next year?

Pete Baldwin 12/5/2012 | 4:19:42 PM
re: Light Reading's Hall of Fame: The First Five

Next year, maybe. We only reserved the five spots for this first salvo ... but it's good to know we've got a strong pool of candidates to add to the list in the future. Thanks for the input.

Pete Baldwin 12/5/2012 | 4:19:17 PM
re: Light Reading's Hall of Fame: The First Five

Bob Metcalfe is joining the University of Texas, Austin, as Professor of Innovation and <clearing throat grandly> Murchison Fellow of Free Enterprise. Wonder if he also gets to wield the Scepter of Market Openness.


News release:  Bob Metcalfe Goes Back To School.


He did an amusing and very Metcalfian interview with Mass High Tech, where he cites Austin's music scene and the daily JetBlue Austin-to-Boston flight.  He also says he's working on a book -- not an e-book, but an "n"-book, the "n" standing for "networked." Of course, he doesn't explain.


http://www.masshightech.com/stories/2010/11/08/daily8-Ethernet-founder-Metcalfe-heading-to-Austin-talks-of-next-moves.html

HOME
Sign In
SEARCH
CLOSE
MORE
CLOSE