WorldCom was at one time the second-largest long-distance telecommunications corporation in the United States, and its roots were in Mississippi. The corporation imploded in scandal, resulting in prison time for its cofounder.

The company began in a Hattiesburg coffee shop in 1983 when businessmen Murray Waldron and William Rector set out a plan to create a telephone service provider that they called Long-Distance Discount Services (LDDS). In 1985 the company named as its chief executive officer Bernard Ebbers, a Canadian-born former basketball star at Mississippi College who was known for serving meals to the homeless at Frank’s Famous Biscuits in downtown Jackson and for wearing jeans, cowboy boots, and a turquoise watch to work.

Under Ebbers’s leadership, LDDS grew tremendously. The company went public in 1989 through the acquisition of Advantage Companies and over the next decade built itself into a US telecommunications giant through acquisitions and mergers with companies such as Advanced Telecommunications (1992), Resurgens Communications Group and Metromedia Communications (1993), IDB Communications Groups (1994), Williams Telecommunications Group (1995), MFS Communications Group (1996), and, most significantly, CompuServe, Brooks Fiber Properties, and MCI Communications (1998).

After the 1995 acquisition, LDDS became known as WorldCom, and the 1998 merger with MCI Communications was worth forty billion dollars, the largest merger in history to date. In 1999 WorldCom announced an agreement to merge with Sprint, leading WorldCom’s stock to peak at sixty-four dollars per share. In its heyday, the company’s operations were organized into three divisions: MCI WorldCom, which included US telecommunications; UUNet WorldCom, which provided Internet and technology services; and WorldCom International. At the turn of the twenty-first century, MCI WorldCom was the second-largest long distance company in the United States behind AT&T, was a Wall Street darling, and was poised for continued growth and success.

However, when the US Justice Department forced the abandonment of the proposed merger with Sprint, WorldCom’s stock values started to decline. In addition, banks began to pressure Ebbers to cover his margin calls on the WorldCom stock he had used to finance his personal timber and yachting businesses. In 2001 Ebbers received a corporate loan of more than $400 million from the WorldCom board of directors to cover the margin calls in hopes that he would not need to sell substantial company stock. This strategy failed, but the financial confusion surrounding the loans caught the eye of WorldCom internal auditor Cynthia Cooper, a native of Clinton, Mississippi. After discovering a string of accounting irregularities, Cooper and her team began investigating in March 2002, often working at night and in secret to avoid arousing suspicion. Within a few months the internal auditors had uncovered a $3.8 billion accounting fraud, again the largest in US history to that time. On 21 December 2002 Time magazine recognized Cooper as one of its three Persons of the Year for her efforts.

In April 2002 John Sidgmore, the former chief executive officer of UUNet Technologies, replaced Ebbers at WorldCom’s helm, though Sidgmore was forced out less than a year later. By June 2002, others involved in the three-year fraud scheme—including chief financial officer Scott Sullivan, comptroller David Myers, and director of general accounting Buford Yates—had all been terminated. On 21 July 2002 WorldCom filed for Chapter 11 bankruptcy protection in what was then the largest such filing in US history. After a year of restructuring, WorldCom changed its name to MCI and relocated its corporate headquarters from Clinton, Mississippi, to Ashburn, Virginia, in April 2003. In March 2005 Ebbers was convicted of fraud, conspiracy, and filing false documents with Securities and Exchange Commission regulators. He was sentenced to twenty-five years in prison.

Verizon acquired MCI in a January 2006 deal worth $8.44 billion and is now known as Verizon Enterprise Solutions.

Further Reading

  • Amy Barrett and Peter Elstrom, Business Week (14 July 1997)
  • Philip L. Cantelon, The History of MCI: 1968–1988, the Early Years (1993)
  • Funding Universe website,
  • Dennis Moberg and Edward Romar, Santa Clara University website,
  • Marguerite Reardon, “Verizon Closes Book on MCI Merger” (6 January 2006),

Citation Information

The following information is provided for citations.

  • Article Title WorldCom
  • Author
  • Website Name Mississippi Encyclopedia
  • URL
  • Access Date April 7, 2020
  • Publisher Center for Study of Southern Culture
  • Original Published Date
  • Date of Last Update April 15, 2018