MCI: Rebuilding Trust Is Job One

In his Gartner Symposium keynote, CEO Michael Capellas details the steps MCI is taking to regain employees' and the public's trust.

LAKE BUENA VISTA, Fla.—With the final hearing for its bankruptcy plan scheduled for Oct. 30, MCI is poised to put the past behind it. But it still has a legacy of mistrust to overcome among customers.

With many Gartner Symposium attendees here questioning how MCI will regain the trust of customers, Michael Capellas, chairman and CEO of the telecommunications carrier, spoke to those issues in his keynote address this morning.

"There is no question rebuilding trust is our top priority," Capellas said. "There is some good news. Morale is outstanding—particularly in the field. Great communication goes a long way. You can never communicate enough. E-mails, voice mails, site visits, town halls, Web delivery—its amazing how you can bond an organization together. Trust inside was a problem I thought we would face, but weve had very low turnover."

With respect to public trust, MCI has undertaken several steps. "From a board perspective, we recruited a world-class board, including a former U.S. attorney general, former head of the FASB," he said. "Weve had a fabulous year recruiting on the new management team. The prior management team is clearly gone. But there is no magic to this—no silver bullet. It takes time."

MCI also trained 55,000 employees in ethical decision making. "The way you earn public trust is to do the right things from the inside out. We have a series of corporate governance reforms that are far reaching. We have a zero tolerance policy—you do something wrong and youre out," Capellas said.

"On the customer side, I have great belief in our customer advisory board," he said. "They give us advice [and] review our strategy and product roadmaps. Weve reached out to the industry. Weve tried hard not to get ahead of our headlights."

The final steps toward emerging from bankruptcy include filing a final plan, which has been done; gathering enough votes for the plan, which Capellas is confident has happened; and then having the court hearing on Oct. 30. Capellas was unsure about how soon a ruling will be given. But for "one of the most complex bankruptcies possible," MCI is "well on our way," said Capellas.

The plan calls for MCI to remain a public company—it plans to post its first quarterly earnings after bankruptcy early next year. "When were done we will be in strong shape relative to our financial position," Capellas said.

MCIs plan to expand its business calls for investments in broadband and its multiprotocol label switching network, but not in wireless. MCIs plan there is to partner with wireless providers to offer different service bundles, Capellas said.

MCI also plans to build on its strong consumer franchise to move into small and medium-sized businesses. "On the enterprise side we will continue to go heavily in that space, invest in the IP side, go up the services stack. Youll see us continue to invest in the edge," he added.

Capellas sees the emergence of XML and a new generation of converged voice and data applications as opportunities for MCI to expand its business as well. "The problem with XML is that its slow. You will need acceleration all over the place. Companies will distribute more computing to the edge of the network. We know how to do that. How you optimize on networks and the blending of networks becomes more important," he said.

Over the next year, MCI will focus on quality of service—its primary differentiator, according to Capellas.

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