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The Telecom Bankruptcy Game

Diary of a Madman Vincent Price turns in another classic performance in Diary of a Madman produced and written by Robert E. Kent based on stories by Guy de Maupassant. Price stars as Simon Cordier a man who has become possessed by an evil spirit. Convinced he is losing his mind Cordier resumes his hobby of sculpting hoping to distract his attention and help him relax. He hires a model (Nancy Kovack of Frankie and Johnny ) to pose for him she is married but he falls for her and makes plans to run away with her. When she is murdered her husband is sentenced for the crime. But Cordier soon finds the shocking truth about who the real murderer is... Expertly directed by Reginald Le Borg Diary of a Madman is a classic of the horror genre and a must for fans of Vincent Price. Not rated. Hi-Fi. NTSC format. Color.

Incidentally, I'm like you and I very much enjoy reading about the death of an academician in the newspapers. I always ask myself immediately: 'Who's going to succeed him?' And I draw up my list.

  - Guy de Maupassant, Bel-Ami

It's called the Death Game or Death Pool, and it's usually focused on the rich and famous. The rules are simple: You and I create our own lists of celebrities we believe are only days or weeks away from knocking off. We agree to a "dead" line for the end of the game (usually, the end of the calendar year). Then we sit back and start watching the news to see who scores the most deaths.

The queen's mum passed on - that's a point for you. Alice in Chains lead singer Layne Staley was found rotting in his run-down apartment with needle tracks all over his body - that's a point for me.

Of course, some versions of the game outlaw the selection of rock singers, because they're too easy; others prohibit you from picking a relative of the Kennedy family (also too easy). Ditto rappers. And the pope. In fact, there are probably a thousand variations to the game - bonus points for correctly picking stars who are younger than 40, or for actually helping to CAUSE the death of a boy-band member - all done in an effort to distract players from the grotesque reality that they're cheering for real human beings' biological clocks to stop ticking.

Here is a variation to try, and I don't think you have to break any laws: The Telecom Bankruptcy Game. Telecom has been a disaster for just about everyone. Investors have lost some $2 trillion as stock prices have tumbled 95% or more from their highs. Half a million workers have lost their jobs during the past two years. Dozens of debt-laden companies, from Winstar Communications to Global Crossing, have collapsed into bankruptcy. And on July 21, 2002, the sector sank to a once-unimaginable low when WorldCom Inc., the company that embodied the industry's power and promise, filed the largest bankruptcy claim in U.S. history.

Take the traditional celebrity death game, but turn it on telcos. After all, it's kind of morbid to genuinely pray for human death; but there's great hilarity in trying to forecast the next Global Crossing (particularly if you're not employed there). And instead of being totally dismantled like GST or NorthPoint, all we are going to care about is Chapter 11. So if one of your companies files for Chapter 11 and then finds a way to emerge a la Covad or McLeodUSA, you still get your points. In fact, there are bonus points for players who pick a company that both files for and emerges from bankruptcy during the game (see Bonus Points below).

RULES

Read the rules. Thoughtfully craft your list. Then email it to a friend in the business. But do it quickly, because if your list arrives AFTER one of your companies files for Chapter 11, you don't get the points. Stay in touch by email, assuming your own company doesn't kick the bucket first, award points as they accrue and set a deadline for the game to end. Your telecom bankruptcy list must include:

1. Exactly 10 companies.

2. At least one of the 10 biggest domestic carriers. (WorldCom, anyone?)

3. At least one CLEC. (Kind of a no-brainer, right?)

4. At least one wireless carrier.

5. At least one Regional Bell Operating Company headquartered in Denver. (Need a hint?)

6. At least one ISP. (Another no-brainer)

7. Only companies NOT already in bankruptcy proceedings (trust me, we all knew the fiber glut would eventually send Metromedia Fiber Network into bankruptcy court; but the game doesn't officially commence until June 1, and they filed on May 20).

8. At least one company that reported POSITIVE earnings for 2001 (I think you have about four to choose from).

9. Only companies whose primary business is providing telecommunications services. If you're not sure what that means, go dust off your copy of the Telecommunications Act of 1996, and read Section 3 (a) (2) '(48 - 51). You still won't particularly know what it means, but at least you and I will be totally confused by the same law.

BONUS POINTS

For all you overachievers, looking to get the edge on your fellow players (read: still employed by a telco, but lacking any specific day-to-day responsibilities, so you've got all the time in the world to research this project), here are a few ways to earn bonus points.

1. The Who? Bonus - You get one extra point if you correctly prognosticate the demise of a company that nobody else picked.

2. The Adelphia Bonus - You get two extra points if the company you pick also has a subsidiary that goes bankrupt. (OK, OK. So technically Adelphia Business Solutions already filed for bankruptcy before this game began. But I can't just keep taking shots at Qwest, even though their former 40 percent stake in uber flop KPNQwest makes them the early favorite for this bonus.)

3. The Covad Bonus - You get one extra point for each company on your list that both files for and emerges from bankruptcy during our game.

4. The NextWave Bonus - You get two extra points for a company that files for bankruptcy AGAIN (even if the first bankruptcy was filed before June 1, 2002).

5. The Enron Bonus - You get an as-yet-unquantifiable bonus if the sketchy accounting that covered up the impending bankruptcy of a company you pick leads to a formal investigation by the SEC, Congress and the Reverend Jesse Jackson. To determine the exact bonus awarded, find your adjusted gross income on line 33 of Federal Form 1040. Subtract total pensions and annuities in line 16a and divide difference by dependent's social security number. Proceed to . . . never mind. Way too confusing. Instead of rewarding you for picking a company that mimics Enron's effect on accounting, I'll reward you for picking a company that mimics Enron's effect on NBC. I give you . . .

6. The Tom Brokaw Bonus - You get FIVE extra points if the bankruptcy of a company you pick leads to one of those sappy, human interest stories disguised as "news" that NBC loves to run under the heading "The Fleecing of America." Seriously, how many former Enron employees can they find who put all of their retirement savings in Enron stock, didn't cash in when it peaked, and now find themselves penniless at age 63? And how many times can they broadcast essentially the same storyline with different former Enron employees, before it's no longer "new" enough to be considered news? I mean, I expect sentimental tripe from 20/20, 60 Minutes, 48 Hours and any other "news journal" with a number in its name. But why do we have to endure the same tear-filled retellings every time the evening news comes on? Am I the only one tired of hearing that Enron screwed its employees? Didn't we know that already? Hello?

Here's a little tip for all of you bankrupt-former-Enron-employee-wannabes who may have skipped your college's Financial Planning 101 seminar, because you were trying to decide whether to put Princess Di or Prince Charles on your 1985 Greek-Week death pool entry: DIVERSIFY. If you're dumb enough to put all your eggs in one basket, I'm smart enough to put your nest egg on my death list.

The crisis could relegate the U.S. to second-class status in the communications industry. In the 20th century, U.S. phone services were the envy of the world, reaching 95% of the population and operating with 99.999% reliability. They played a crucial role in the U.S.'s economic development and even served as a strategic asset in World War II, thanks to innovations such as early wireless communications. But in recent years, the rollout of high-speed Net access and other services has been led by other nations, such as South Korea and Japan. As telecom companies cut back on capital spending, it will be harder to catch up.

Already, the fallout is brutal. The $2 trillion in losses that telecom investors have suffered is twice the damage caused by the bursting of the Internet bubble and on a par with the savings- and-loan crisis of the late 1980s. Bank exposure to the telecom mess is tens of billions of dollars. Worse, the investigations into WorldCom, Global Crossing, and Qwest, layered on top of the Enron scandal, are dealing a huge blow to investor confidence. They've led the entire stock market down as the Standard & Poor's 500-stock index has tumbled 29% drop so far this year.

The Enron scandal tars the name of venerable Arthur Andersen, which in June 2002, settled allegations of fraud stemming from its audit of Houston-based Waste Management and paid a $7 million fine without admitting any wrongdoing. Last year, again without admitting wrongdoing, Andersen agreed to pay $110 million to settle a class action brought on behalf of shareholders of another client, Sunbeam, which had misstated its financial results during the 1990s. These days, an Andersen competitor observes sardonically, settling a fraud case appears to be good for attracting business from other firms that want a soft touch for an auditor.

Enron paid Andersen $25 million for its audit last year and $27 million for "consulting" and other services. How can any auditor be independent when his client is paying this kind of money?. All this talk of Enron reminds me . . . there's one last criterion I meant to mention earlier, which will probably prove the hardest to meet: your list must include at least one company whose independent auditor is NOT Arthur Andersen.

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