Chapter 22 concerns for telecoms

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As a parade of telecommunications carriers begin to emerge from Chapter 11 bankruptcy proceedings with drastically reduced debt loads, many Baby Bell executives and industry analysts fear the carriers could turbocharge an already-raging price war, driving the telecom sector into an even deeper financial disaster.

The company creating the most anxiety — and drawing increasing fire in regulatory proceedings and political lobbying — is WorldCom Inc., which says it hopes to leave Chapter 11 by next September. Some Bell leaders and unions representing Bell workers are demanding that WorldCom, which is under investigation for $9 billion in alleged accounting fraud, be broken up or otherwise blocked from using Chapter 11 to become a revitalized competitor.

Judy Reed Smith of the Boston consulting firm Atlantic ACM agreed that, based on measures such as revenues and share price, "the ones that are coming out of bankruptcy are not flying. I hear a lot of people talking about carriers facing Chapter 22 — when you go into Chapter 11 twice."

http://digitalmass.boston.com/news/2...com_fears.html

Janice