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The Great Telecom Implosion

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The dimensions of the collapse in the telecommunications industry during the past two years have been staggering. Half a million people have lost their jobs. In that time, the Dow Jones communication technology index has dropped 86 percent; the wireless communications index, 89 percent. These are declines in value worthy of comparison to the great crash of 1929. Out of the $7 trillion decline in the stock market since its peak, about $2 trillion have disappeared in the capitalization of telecom companies. Twenty-three telecom companies have gone bankrupt in a wave capped off by the July 21 collapse of WorldCom, the single largest bankruptcy in American history. And the storm is not over. Many other firms, including some of the biggest, are teetering under a heavy load of debt. Altogether, the industry owes a trillion dollars, "much of which will never be repaid and will have to be written off by investors," Federal Communications Commission Chairman Michael Powell told the Senate Comme

The Great Telecom Implosion The Great Telecom Implosion It's not just individual companies that are going bankrupt. The industry as a whole has gone from market reform to market ruin. By Paul Starr The American Prospect, September 8, 2002 T he dimensions of the collapse in the telecommunications industry during the past two years have been staggering. Half a million people have lost their jobs. In that time, the Dow Jones communication technology index has dropped 86 percent; the wireless communications index, 89 percent. These are declines in value worthy of comparison to the great crash of 1

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