WorldCom Worries

Will the WorldCom crisis turn out to be a "neutron scandal" that punishes guilty executives while leaving the network and customers intact? Most early analyses predict that the value of WorldCom's core Internet assets will ensure their continued operation. But that's not reassuring enough for some customers, who are preparing for a range of outcomes - including interruption of service on short notice.

Closures of web hosting and colo facilities are nothing new, and in the vast majority of cases distressed providers have arranged smooth customer transitions to other providers or facilities. When a hosting company is on the ropes, customers usually know their options and are ready to act on them. But the recent closure of several MFN data centers resulted in service interruptions, leaving prominent customers to relocate equipment on short notice.

Against that backdrop, Giga Information Group is warning WorldCom customers that they shouldn't expect reasonable lead time to migrate to other services or providers, and should do their contingency planning now. Many customers are monitoring events closely to be prepared in case WorldCom's financial woes turn into operational headaches.

WIth a Chapter 11 filing looking more likely, some industry observers predict a sale of WorldCom's critical Internet assets to a more stable provider. But WorldCom CEO John Sidgmore says UUNet and Digex are not for sale. In his comments to Congress and the public, Sidgmore has repreatedly emphasized WorldCom's importance to the American economy and national security.

It's not clear if WorldCom can look to the government for protection. Can its customers? The Wall Street Journal reported today that FCC Chairman Michael Powell has written to legislators suggesting that his agency "was prepared to intervene in future WorldCom bankruptcy proceedings to prevent service disruptions."

How important is WorldCom to the Internet? According to research this week from TeleGeography, WorldCom accounted for at least 30 percent of the wholesale U.S. backbone access market in 2001, three times more than its largest rival. WorldCom also connects more than 3,400 networks throughout the world, more than twice as many as either AT&T or Sprint.

Even if the worst-case scenarios were realized, would network problems for WorldCom disrupt the entire Internet? An analysis of KPNQwest's recent problems suggests that the fears of disruption usually exceed the actual impact. Remember that the Internet was designed, at least in part, as a network that would survive a nuclear attack on a key city. When a crisis materializes, it turns out to be more resilient than we imagine.