Key WorldCom customers stay put

WorldCom's revelations of financial impropriety last week have forced customers to decide what to do about their mission-critical...

WorldCom's revelations of financial impropriety last week have forced customers to decide what to do about their mission-critical data services.

Analyst firms have been quick to urge clients to terminate their contracts with WorldCom if possible or to seek backup service. Yet two of WorldCom's biggest customers certainly do not expect to defect.

A spokesman for the Nasdaq Stock Market, a WorldCom networking customer since 1991, said the New York-based stock exchange had no plans to change any of its WorldCom services, even as it prepares to introduce its new electronic-trading floor later this month.

Nasdaq does have contingency plans in place in case WorldCom experiences a catastrophic failure. It has also built safeguards into its contract with WorldCom. "They can't take people off our service without our approval," the spokesman said.

The US Federal Aviation Administration is another WorldCom customer. It runs its air traffic control system over a WorldCom backbone. An FAA spokesman said WorldCom has given the government assurances that its service won't be affected by the job cuts.

However, the organisation will award a new data networking contract at the end of July and WorldCom is currently competing with Raytheon, Lockheed Martin and others for the contract.

Web search engine company Ask Jeeves is another WorldCom customer. "Our first reaction is that the sky is not falling," said Dayne Sampson, Ask Jeeves IT vice-president.

The company began using a WorldCom collocation facility for its Web site last year. Sampson said Ask Jeeves has been happy with the service so far and has received assurances that its service-level agreements will continue to be met.

"If the service levels fall off, we could terminate the contract and move elsewhere, but it is our last desire to do that," Sampson said.

He added that Ask Jeeves went through a similar situation last year with Web hosting vendor Exodus Communications and has agreements with WorldCom competitors that would keep its service in place without interruption if WorldCom was unable to continue operating. "We're prepared to react to it if we have to," Sampson said.

Brownlee Thomas, an analyst at Giga Information Group, warned that WorldCom customers who tried to move to a new supplier might be disappointed with the service they receive.

The telecommunications industry has been in a deep recession and WorldCom competitors have also been hit hard. "Those companies aren't going to hire people to take care of you," she said. "They'll try and do more with less."

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