Telco giants to face US Senate

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Telco giants to face US Senate

Top executives of three financially embattled telecommunication companies are scheduled to appear before a US Senate hearing tomorrow (30 July).

South Carolina Democrat Senator Fritz Hollings will convene the hearing entitled "Financial turmoil in the telecommunications marketplace; maintaining the operations of essential communications facilities".

The hearing will first include testimony from Michael Powell, chairman of the US Federal Communications Commission, and then a panel made up of John Sidgmore, president and chief executive of WorldCom, John Legere, chief executive of Global Crossing and Afshin Mohebbi, president and chief operating officer of Qwest Communications International.

The title of the hearing suggests that the executives may not face a grilling on the alleged wrongdoing at their respective companies but will instead look at what the effects of the problems will be on telecommunication users and consumers.

The bankruptcy of WorldCom earlier in the month brought on fears of chaos should the carrier collapse under the weight of $32.8bn (£20.9bn) in debt and cease trading. WorldCom carries a huge amount of Internet and data traffic and also provides long-distance service for millions of consumers, so that an abrupt shutdown would likely cause major disruption as customers raced to change carriers. However, fears subsided after an agreement with a US Bankruptcy Court meant the carrier should be able to continue business for sometime.

The hearing is also likely to be one of the first places Qwest's Mohebbi will speak after his company admitted to accounting irregularities over a three-year period from 1999 to 2001. The company has said that it will restate earnings for the years and has also withdrawn its financial guidance for the remainder of this year.
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