ORLANDO, Fla.-- MCI Chairman and CEO Michael Capellas is anticipating that the final hearing on his recommended bankruptcy plan, slated for Oct. 30, and a subsequent judicial ruling will set the company free from its cloud of uncertainty.

Capellas told the crowd of 6,000 IT professionals at the Gartner Symposium/ITxpo 2003 here that MCI has a solid plan going forward, 99 percent of the votes needed to approve the reorganization plan and a strong capital base. MCI plans to remain a public company, with the reorganized entity posting quarterly earnings in the first part of 2004. "We are down to very, very minor objections," Capellas said.

However, Symposium attendees voiced concern of about MCI's trustworthiness given its past history. "There is no question that regaining public trust is our top priority," Capellas said. "The good news is morale is absolutely outstanding, particularly in the field. Internally, trust from an employee point of view was a problem I thought we would face--it was inherent in the organization, but we've had very low turnover." He admitted that employees didn't have a lot of options for employment given the troubled telecom industry, but noted that average tenure in the field for employees serving enterprises is 17 years.

Capellas said that MCI has initiated new programs to enhance its reputation. "From a board perspective, we recruited and constituted a world-class board, including a former U.S. attorney general, a former number two at the Department of Justice and a former head of the FASB [Financial Accounting Standards Board]," he said. "We've had a great recruiting year on the new management team. We have people who are really motivated and we're blending it with a world-class board and the injection of new management talent. There is no magic to this, but you've got to make people believe."

Regaining public's trust is "top priority" Michael Capellas, CEO, MCI

MCI has also trained 55,000 employees about ethical decision-making via an online video, and the company has adopted a zero-tolerance policy. "You do something wrong, and you are not employed in the morning," Capellas said. In addition, MCI has formed cross-industry customer advisory boards to give advice on business and product strategies.

During the last several months MCI has focused on improving quality of service, Capellas said, and coming out of bankruptcy will increase spending on internal IT, broadband and multiprotocol label switching networks. MCI also plans to leverage its backbone, which cost about $38 billion over the last few years to build, across several market segments--enterprises, consumers and small and medium-sized businesses.

Finally Capellas said that MCI would not compete with the likes of IBM and EDS in the services business. "We are not going to be in services business to do business process engineering or set the SAP table or application development. We are uniquely or in cast of a handful who actually know the integration where application layer meets the network layer. We will start the services business as an extension and value creator on top of our core capabilities and as we grow it, it will become more and more part of the revenue stream."