Companies bleeding with leviathan losses and flush with embarrassment from weak sales, mismanagement and corruption (the usual stuff in telecom and high-tech sectors these days) are increasingly turning to the tool of last resort-the open letter.
The letter begrudgingly acknowledges, in a roundabout way, misdeeds of unnamed third parties-bad actors, ones with astronomical salaries and gilded severance packages who’ve been politely asked by fawning boards to step aside for the good of the company. It’s about distancing those presumably clean from those who’ve been caught. It’s about communicating the seriousness with which the company attaches to the matter. It’s outlining-one, two, three-steps being taken to guarantee nothing like this ever happens again. “All the bad stuff is behind us. You can trust us now.”
Last week, WorldCom Inc.-in the midst of a makeover designed to remedy bankruptcy and accounting fraud that could reach $9 billion-made a stab at it. It backfired badly.
The No. 2 long-distance carrier, famous for fumbling around with a wireless strategy that is no more, reached out to business and residential customers to highlight what it believes is a bright spot in its portfolio: network reliability.
“Throughout our restructuring, network reliability never has been-and never will be-an issue for our customers,” WorldCom’s full-page ad stated.
But credibility could continue to be.
The WorldCom ad, in prose accompanied by a chart, boasted it had fewer outages than compatriots Qwest, Sprint, AT&T, BellSouth, SBC and Verizon from October ’01 to September ’02. The ad was well timed. The Senate was debating the homeland security bill, which passed overwhelmingly. It’s Topic A. No hoorays from the wireless industry, though. There’s still no money for wireless priority access and public-safety interoperability.
Legislation aside, WorldCom’s ad is problematic. So say a key Federal Communications Commissions official, who requested anonymity, and Verizon, the nation’s largest wireline and wireless carrier. Verizon last week drafted a letter to demand that WorldCom immediately pull the ad.
WorldCom’s network outage numbers apparently do not tell the full story. Sound familiar? Verizon has more exposure than WorldCom. The size and scope of its facilities dwarf those of WorldCom. Second, some criteria for reporting network outages apply to local wireline carriers but not to long-distance operators. Also, there supposedly is a gentleman’s agreement among carriers not make competitive use of network outage data.
Michael Capellas, who just left Hewlett-Packard to lead WorldCom, is scrambling to restructure the board. Last week, he talked about restoring the public’s confidence and rebuilding employee trust. A clean audit of the latest ad campaign might be a good start.
