TAKE THE HINT

A lot of folks are unhappy about WorldCom's bankruptcy proceeding. They don't believe a company should be allowed to cleanse its sins through the Chapter 11 process and re-emerge as a stronger, debtless competitor that can drive prices down. As distasteful as that seems, there's not much anyone can do about it because the bankruptcy judge will only be interested in whether WorldCom's reorganization plan will restore its viability, not if it harms those who played by the rules. Perhaps this is why the Communications Workers of America last week asked the U.S. General Services Administration to bar WorldCom from bidding on future federal contracts, as it has done with equally scandal-plagued Enron and Arthur Andersen. Such an action by the GSA would immediately deliver a significant blow to WorldCom's future fortunes, as an estimated 8% of the carrier's revenue come from government work. It could also have some sway with the bankruptcy judge, who will likely be concerned about how that revenue loss would affect the carrier's reorganization. But such an action could carry a greater long-term consequence: Should the federal government decide it wants nothing to do with WorldCom, other companies would surely come to the same conclusion. Consequently, WorldCom should take the hint and liquidate. With Verizon poised to make a strong push into the enterprise market and other previously bankrupt long-haul players back on the scene or about to rejoin the battle, WorldCom would hardly be missed.