Bailing Out WorldCom

Can You Hear Me Now, Baghdad?

Soon after Bush announced the liberation of Iraq and the end of the war, private entrepreneurs sprang into action by setting up cell phone service in Baghdad. (Saddam had banned cell phones.) Prime among them was Batelco, partly owned by the government of Bahrain. It invested $5 million to get a system up and running and promised to put in a total of $50 million. MTC Vodaphone, 25 percent owned by the Kuwait government and a franchisee of Britain's big Vodaphone company, rushed into the Baghdad market to set up its roaming service there.

But this notable example of spontaneous free-market capitalism was shut down by the U.S.'s Coalition Provisional Authority.

Who stands to gain from the authority's ban? Currently, the U.S. military and others use a Baghdad network built by WorldCom, the corrupt and bankrupt American telecommunications firm that is trying to revive itself by returning to the name MCI after defrauding the U.S. government. Of course, the Iraqi public isn't allowed to use that system.

Details

Mondo Washington this week:

  • The Burning Bush The Rest of Us Don't Have a Prayer
  • Bailing Out WorldCom Can You Hear Me Now, Baghdad?
  • Rummy Is So Yummy But Journos Too Nerdy for Manly Man List
  • Bush's 9-11 Secrets The Government Received Warnings of Bin Laden's Plans to Attack New York and D.C.
  • A spokesperson for the sputtering company told the Voice that MCI is providing the cellular network "for the U.S. federal government and humanitarian efforts." Asked if the company would bid for a network available to ordinary Iraqis, she said that "if we feel we have something to add—services to provide—we will most likely bid on the project."

    It would seem that WorldCom-turned-MCI would have an inside track. The Provisional Authority's rules for upcoming bidding for licenses say that "no government shall directly or indirectly own more than five percent of any single bidding company or single company in the consortia."

    That would cut out the firms partly owned by Kuwait and Bahrain, but Darrell Trent, the U.S.'s senior adviser at Iraq's Ministry of Transportation and Communications, insisted the rules weren't meant to favor U.S. firms at the expense of Arab ones.

    However, Batelco official Rashid Al Sinan told the Bahrain Tribune, "It seems that none of the companies in the Middle East will be able to bid in these conditions. I am sure there will be a number of companies opposing this."


    Additional reporting: Phoebe St John

     
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