Sign in Subscribe
Internet service providers

MCI Worldcom's Network Shutdown Devastates Small Internet Service Providers

Strategic Insights

— 2 min read

The 10-day partial shutdown of MCI Worldcom's high-speed data network had a devastating impact on dozens of small Internet service providers who rely on the network to route subscribers onto the Internet. These mom-and-pop players, along with more than a quarter of all Internet service providers nationally, were forced to close altogether, with some fearing they may go out of business as a result. America Online and Compuserve also experienced disruptions, with up to 2 million subscribers affected.

Key Takeaways:

  • MCI Worldcom's shutdown affected over 250,000 subscribers, with some small Internet service providers potentially going out of business as a result.
  • The network problem forced 66 out of 150 small service providers to lose their networks completely, according to DataXchange.
  • A. K. Jordan, president of Intellitech, a service provider in Highland Park, N.J., said his company's subscribers were unable to access the World Wide Web, despite being assured by MCI that the problem would be fixed in two hours.
  • MCI Worldcom has offered customers two free days of Internet access for each day they had been unable to use the network.
  • Industry analysts speculate that up to most of the stranded Internet service providers may look to one of the other major network providers for access to the Net.
  • MCI provides national backbone access to 40.9 percent of national service providers and 23.6 percent of small and regional providers.
  • Larger and regional providers, such as Earthlink Network, typically rely on multiple network providers for backbone access.

Statistics:

  • 250,000 subscribers lost Net access due to the network failures (DataXchange).
  • 66 out of 150 small service providers lost their networks completely (DataXchange).
  • MCI provides national backbone access to 40.9 percent of national service providers (Cahners In-Stat survey).
  • MCI provides national backbone access to 23.6 percent of small and regional providers (Cahners In-Stat survey).
  • 2 million of 20 million America Online subscribers were vulnerable to the network failure (America Online).
  • 500,000 subscribers in 50 communities had no second access number available (America Online).

Sources:

  • "MCI's Network Shutdown Devastates Small Internet Service Providers," The New York Times
  • DataXchange, a Washington-based company that buys Internet access wholesale from MCI
  • Mark Stutz, a spokesman for RMI.Net, the Denver parent of DataXchange
  • Linda Laughlin, MCI Worldcom spokeswoman
  • Jeanne M. Schaff, senior analyst with Forrester Research
  • "National Backbone Access: MCI Leads the Pack," Cahners In-Stat, July 1999
  • America Online and Compuserve

Read more