The fighting entrepreneurial spirit was a hallmark of the man who helped found MCI -- William G. McGowan. McGowan, a financier who was brought in to save the nearly bankrupt MCI Communications Corp., in 1968 was a scrappy fighter determined to take on the giant AT&T, which at that time had monopoly control over all telephone service in the United States.
Early in his bid to offer long-distance service, McGowan concluded that the company needed to be in Washington, where it could monitor its battles in the courts and Congress and before the Federal Communications Commission. Until then, the only telecommunications presence in the area was from Comsat International Inc. and Intelsat Ltd., government-created satellite firms.
Workers staff the MCI long-distance center in Reston in 1988. The company helped make Washington a telecom hub.
(Harry Naltchayan -- The Washington Post)
|
_____Multimedia_____
•
Video Verizon Communications Inc. has agreed to acquire MCI Corp. for more than $6.7 billion in a deal represents the third big telephone industry merger in two months.
|
| |
_____Telecom Deals_____ The Verizon-MCI deal announced on Feb. 14 is the third major telecom merger unveiled since December.
• On Jan. 31, the Texas-based Baby Bell SBC Communications announced its acquisition of AT&T for $16 billion.
• In December, two leading wireless phone services -- Nextel and Sprint -- announced that they would merge in a $35 billion deal. | | |
|
Over the years, the government was MCI's "oxygen line," issuing decisions and passing laws that enabled the upstart firm to become the second-largest long-distance firm, after AT&T, said Scott C. Cleland, chief executive of Precursor Group Inc., a Washington research group.
In the process, MCI became a master of lobbying, said attorney Lipman. The little law office helped lead to the creation of many more law offices and telecommunications trade associations. Before MCI, companies -- especially government-regulated firms -- dealt primarily with the agencies that oversaw their business. But "MCI set up a new paradigm in terms of proactive government relations," Lipman said, forcing the government to expand competition in previously government-protected industries such as airlines, financial services and electricity.
Last year, however, MCI lost a major regulatory battle over the right to lease local phone lines that resulted in the company pulling back from its consumer business.
And the industry is consolidating again. "Bill McGowan would be rolling in his grave," said one former employee who spoke on condition of anonymity because she still works in the telecommunications field.
A former MCI executive said McGowan, "who did not have a fond word for monopoly, would be aghast at this happening."
Staff writers Yuki Noguchi and Amy Joyce and researcher Richard Drezen contributed to this report.
