CARELESS DEBT

Two years ago, the mantra chanted by carriers was grow, grow, grow. Consolidation, acquisition and a general casualness with the checkbook led to soaring debt among the nation's largest and smallest carriers (the difference between them now is the large ones are still here). Now the carriers that are still alive are scrambling to back down the debt, coming up with elaborate schemes to wipe their balance sheets of any red ink. Tyco is splitting into four parts, hoping to raise enough cash to pay off its $11 billion in debt. Qwest has registered with the SEC to offer up to $2.5 billion in new debt and equity securities. The new shares plus a few asset sales would wipe $2 billion from Qwest's books this year. Broadwing sold its directory business. And those are just the companies that choose to pay their bills. Many more are opting for Chapter 11. It's no revelation that when times are good, debt mounts while companies grow, and in tighter times, boards and CEOs trip over themselves to pay down that debt, trying to be fiscally responsible. But what's amazing is how much these companies act like a college kid with his first credit card — racking up charges to the limit and scrambling to pay off the balance when the collectors start calling. But that college kid doesn't have a CFO or an army of CPAs managing his finances. Nor does he have an auditing firm and a board of business-savvy shareholders to rein him in if he gets too spend thrifty. Too bad so many telecom firms seem to have just as much sense.