FCC Gives WorldCom Stern Warning

FCC warns Sidgmore to keep regulatory duties in mind during reorganization.

The countrys top telecom cop wrote to WorldCom Inc. CEO John Sidgmore today on the heels of the companys bankruptcy filing, admonishing him to keep his regulatory duties in mind during the reorganization and to "take these requirements seriously."

Despite Sidgmores public assurances on Monday that WorldCom intends to emerge from bankruptcy stronger than before and that services will not be affected during the restructuring, Michael Powell, chairman of the Federal Communications Commission, outlined the obligations that WorldCom is required to take before shutting off services.

Regardless of the companys financial circumstances, Powell said, the FCC must approve license transfers related to interstate telecom services and wireless services. Therefore, before WorldCom could be acquired by another party -- as a whole or in parts -- the FCC must authorize the license transfers. If bankruptcy leads to service discontinuation, WorldCom must obey a series of notification requirements, including preventing service impairment until the FCC certifies that that the public interest would not be adversely affected.

"I remind you that any violation of these requirements may result in enforcement of action against WorldCom and any individuals responsible for the violation," Powell warned Sidgmore.

Before discontinuing domestic service, WorldCom would have to provide written notice to customers and would have to wait a minimum of 31 days after the FCC issued a public notice of WorldComs action.

"[The discontinuance process] is intended to provide customers with a reasonable opportunity to find and transition to a new service provider, and the Commission will act promptly and vigilantly to ensure that customers are provided this opportunity," Powell wrote.

The FCC chairman also advised Sidgmore that he would intervene in the bankruptcy proceedings.

Mired in debt and plagued by an ongoing accounting scandal, the telecommunications giant filed for Chapter 11 bankruptcy protection Sunday. And while the move indicates there will be no quick rebound from the companys legal and financial woes, officials hope the filing will keep the carrier and its services intact while a reorganization plan is developed.