Bill McGowan, chairman & CEO of MCI
Bill McGowan, the chairman and CEO of the former MCI Communications, passed away almost 20 years ago in 1992, but his legacy as being the man credited with helping to break up the former Bell System monopoly continues to resonate.
This month, McGowan's life and accomplishments are being celebrated in a new PBS special called Long Distance Warrior: The story of the most famous business leader you've never heard of.
McGowan joined MCI in 1968, a time when the fledgling company was known as Microwave Communications of America. Its focus was on building a microwave relay network between Chicago, Ill. and St. Louis, Mo. that would interface with limited-range two-way radios used by truckers along U.S. Route 66 or by barges on the Illinois Waterway.
Known for his knack for turning struggling companies around and raising venture capital, McGowan was approached by the company. In 1971 McGowan brought Microwave Communications of America's 17 subsidiaries together to form MCI Communications.
But McGowan's biggest challenge came in 1974 when MCI took on AT&T (NYSE: T) and Bell Systems via the Dept. of Justice, a move that helped pave the way to breaking up the former Bell System and opening up the U.S. long distance voice services market.
It's hard to imagine paying more than pennies to make a long-distance call today, but during the AT&T/Bell Telephone monopoly days, consumers could expect to pay up to $4 per minute for a long-distance call.
When MCI was permitted to enter the long-distance business in 1984, the service provider became known for its Friends and Family and 1-800-COLLECT marketing campaigns talking up their lower priced long-distance voice service.
But MCI was hardly just about long-distance voice service. Besides helping to open up the long distance telephone service market to competition, including other companies like Sprint (NYSE: S), the McGowan-led MCI was also a pioneer in developing Internet-based services and harnessing then-nascent optical fiber technologies.
MCI is also credited as the purveyor of the U.S.' first commercial e-mail service, MCI Mail, which it operated from 1983 to 2003. In addition, MCI also took chances on early versions of single mode fiber optic cable then developed by Siecor, a joint venture between then Siemens Telecom and Corning Glass Company. Interestingly, MCI's bet on single mode fiber prompted all of the U.S.-based carriers to adopt the technology on their own respective wireline networks.
On a personal level, McGowan was known as workaholic who would put in over 15 hours a day, supported by a three packs a day cigarette habit and 20 cups of coffee. Eventually his hard living caught up with him and he suffered his first heart attack in 1986.
Following a heart transplant in 1987, McGowan died from second heart attack in 1992. In the late 1990s MCI fell into the hands of WorldCom, which outbid the former GTE, now Verizon (NYSE: VZ), and BT (NYSE: BT) to buy the company. As a way to restore the company's foundation following the accounting scandal caused by former CEO and Chairman Bernard Ebbers, the service provider renamed itself MCI in 2003 with new leadership.
And while McGowan's MCI may have created a competitive telecom industry to challenge the Bell companies, ironically the MCI name was retired in 2006 when it was acquired by Verizon to create what's now known as Verizon Business.