The View From the Bottom

What's it like surviving the telecom bust? Numbers alone don't tell the story.

The rest can be found in bankruptcy court in the Eastern District of Texas and forfeiture proceedings at the Collin County Courthouse and ubiquitous for-sale signs posted in the yards of Frisco tract mansions. It can be found at North Texas Food Bank and the Network of Community Ministries in Richardson and The Samaritan Inn in McKinney where demands on social services are straining resources. Each organization identifies a new kind of client, one who is seeking services not because of addiction or mental illness or domestic violence, but because of job loss. Some of the same people who once donated to these charities are now asking for their help. They need assistance with overdue mortgages, electric bills and oppressive credit card debt. They are older and more educated but have no idea how to secure entitlements. They may have lost their health care, their savings, their spouses, and in a culture where you are your job, they may have also lost their identity. All their lives they had bought into the system and done what was expected: gone to college, gotten married, raised a family. No one ever told them this might happen, which makes them deny for too long that it is happening or obsess for too long over the imponderable "Why me?"


For a by-the-book guy who worshiped structure and was born to tinker, Ted Woods thought he had found nirvana in the Telecom Corridor. The linear progression of his life took him from Air Force brat to Air Force mechanic, from Bossier City, Louisiana, to Dallas, from single guy to married man, but only after much forethought and calculation. He was engaged for two-and-a-half years and put off having children for more than three. Economic security was paramount. But in 1995, he didn't hesitate to accept a job with Fujitsu, a major telecom equipment provider that had positioned itself in Richardson to take advantage of what was certain to be a huge technology boom.

All the pieces were already in place: In the beginning, there was just Ma Bell (AT&T), who did it all. She built, owned and installed your phone, which only came in black. She provided your long-distance service and serviced your local calls as well. She was a stodgy, government-regulated monopoly and might have stayed that way forever, if not for a start-up long-distance carrier named MCI, which maintained its technical headquarters in Richardson. It located its engineers here to be close to Collins Radio, which supplied MCI with telephone switching equipment, since AT&T clearly wouldn't. Instead, Ma Bell chose to sue MCI, whose legal success buoyed the Justice Department to proceed with its own lawsuit--this one resulting in the breakup of AT&T in 1984 and the rebirth of its regional "Baby Bells" as independent entities. The settlement gave AT&T long-distance rights, while conceding local phone service to Southwestern Bell and its six siblings.

John Bennett, an ex-Alcatel international marketing manager, won't allow himself to take a handout from God's Food Pantry in Plano. Instead he volunteers there when he needs food to feed his family of five.
Mark Graham
John Bennett, an ex-Alcatel international marketing manager, won't allow himself to take a handout from God's Food Pantry in Plano. Instead he volunteers there when he needs food to feed his family of five.
Bobby Glenn Taylor, co-founder of God's Food Pantry (his wife, Wanda, is the other founder), cites a startling increase in the number of former telecom workers who regularly rely on his pantry to meet their basic food needs.
Mark Graham
Bobby Glenn Taylor, co-founder of God's Food Pantry (his wife, Wanda, is the other founder), cites a startling increase in the number of former telecom workers who regularly rely on his pantry to meet their basic food needs.

From divestiture, deregulation and some earlier litigation came competition, as hundreds of new long-distance service providers sought equipment from hundreds of new equipment providers. "New companies came into the marketplace with a lot of excitement, a lot of money and a lot of gadgets," says Dr. Stan Kroder, associate professor of telecommunications management at the University of Dallas. The basic black phone turned white, red and cordless. Faxing came into fashion, and it wasn't just the neighborhood drug dealer anymore who had a pager or a cell phone. Optical fiber was replacing copper wiring because it could transmit more information at higher speeds. And these were just some of the innovations in voice communications. The Internet brought with it its own technological wizardry in moving data. Not only were computers wired to homes and offices across the country, but also the build-out of vast data networks was making e-mailing, telecommuting and online shopping a 24/7 reality. Bandwidth--the networks' capacity to transmit information--was accelerated by broadband, which would give us the speedier Internet access of DSL and cable modems.

Dot-coms were in bloom as everybody saw opportunity online, but no one could figure out how to make money out of it. Of course, that didn't matter. Not to telecom and data equipment providers who had fiber to lay, switches to build and broadband to connect. After all, the Internet was growing at a mind-numbing rate of 1,000 percent a year, or at least that's what the experts were saying. What was needed was faster, better, smaller and more of it, so phone rates could come down and customer demand and stock prices could go up.

"There was this euphoria in the marketplace," Kroder says, "and it made executives think, 'We don't know how long this is going to last, but we have to take advantage of it. We have to grow. We have to add sales force. Everything is pointing up.'"

MCI was a magnet for the Telecom Corridor, attracting within its field telecom equipment companies that built out the rapidly expanding networks of telecom service providers. "What typically happens when an industry expands is that all the players want to be near each other," says Dr. Bernard Weinstein, director of the Center for Economic Development and Research at the University of North Texas. "It may have been a historical accident, but we wound up with the largest cluster of telecom employees in the country." The Richardson Chamber of Commerce might argue the corridor grew more by design than accident because it was largely responsible for promoting the benefits of the city to the rest of the world. From Canada came Nortel Networks, from France came Alcatel and from Japan came Fujitsu Network Communications.

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