Numerous carriers including WorldCom, CTC and Global Crossing filed for Chapter 11 bankruptcy in 2002. These filings raised customers' concerns about these companies' services.

How are companies protected if their carrier goes out of business?
The FCC considers voice telephone service an essential service and has written procedures for discontinuance, reduction or impairment of service by carriers. In August 2002 the Massachusetts DTE, Department of Telecommunications and Energy, published rules to help ensure that customers' voice telephone service is transitioned in an orderly fashion to another carrier if their carrier exits the business.

What are the rules?
Carriers are required to file an exit plan with the DTE giving 90 days notice of their intention to exit telecommunications in Massachusetts. Carriers must give customers 60 day written notification that they are exiting the market and if they are being acquired, the name of the acquiring carrier. The intention is to give customers an opportunity to select another carrier or to seek service elsewhere if there is no acquiring provider.

How are these rules enforced?
In Massachusetts, it is up to the Attorney General's office to enforce these Mass Migration Requirements, which are posted on the DTE's Web site at www.state.ma.us/dpu/fileroom.htm.

What about Internet access and data services?
Companies that depend on the Internet and on data communications for critical business functions need to be cautious about whom they select for data service because these services are not regulated as essential services. Therefore rules for an orderly transition to other providers do not apply. When HarvardNet and Digital Broadband closed shop some customers had no Internet links for months.

What has happened in the past when CLECs went out of business?
Both NetworkPlus and Net2000 left telecommunications in 2002. Broadview purchased NetworkPlus and picked up their customers in an orderly transition. Net2000 sold parts of its business to Broadview. The DTE sent letters to the other Net2000 customers. However, some of these customers did not pay attention to the letters and were left without service for a short period.

Cautionary notes
Although there are rules in place for orderly transitions of voice service from a failed carrier to an alternative, enforcement has not been tested. The DTE follows the financial reports in the press and has contact with companies that appear to be in trouble. However, there is really no guarantee that if a carrier suddenly goes out of business, their customers will have time to arrange other service.

In addition, Verizon is legally able to cut off service to any non-bankrupt reseller who does not pay their bill for using Verizon facilities over which they sell service. In Florida, the bankruptcy court granted BellSouth permission to cut off service to bankrupt reseller Supra if Supra does not begin to pay BellSouth. BellSouth is required to notify Supra's customers and offer them service. Regional Bell Operating Companies are owed millions of dollars by bankrupt carriers such as WorldCom and CTC. The RBOCs have asked that WorldCom be liquidated because they can't pay these enormous debts. Carrier bankruptcies have rocked telecommunications suppliers including software and switch vendors and other carriers who transport some of their traffic. WorldCom alone owes $9 billion to its creditors.