Because of its vast global network, "WorldCom is in a better position to deliver on the enhanced-services concept than most other carriers," says Michael Suby, an analyst at Stratecast Partners. However, it's hard to overlook WorldCom's precarious financial situation, he says. During the last six months, for example, the volume of traffic on its UUnet Internet backbone has been growing at only 40%, down from 70% to 80% during recent years.
Vinton Cerf, the company's senior VP of Internet architecture and technology, says that despite a drastically reduced capital budget, "we aren't seeing any degradation in service." He says WorldCom has been careful not to lay off people whose absence would cause network problems.
Federal prosecutors in New York this week indicted Scott Sullivan, WorldCom's former CFO, for securities fraud and other financial crimes. The indictment also charges Buford Yates Jr., former director of general accounting, with the same crimes. According to the indictment, the defendants manipulated WorldCom's books to inflate its net earnings by about $5 billion between October 2000 and April 2002.