ABSTRACT
The telecommunications industry was experiencing a meltdown as Enron was imploding. That industry had once been limited to telephones using landlines, a business that was completely dominated by AT&T. Ironically, the AT&T empire was being reassembled in 2005 and 2006 as four of the seven Baby Bells merged, including BellSouth, which was brought into the fold in March 2006 at a purchase price of $67 billion. The Telecommunications Act of 1996 had sought to enhance competition in the industry by, among other things, requiring competition among local and long distance carriers. Telecom executives had few options but to cook the books in order to please the analysts and to keep the money machine running. A serial accounting manipulator was Nortel Network, which was forced to lay off over 60,000 employees when the company’s executives could no longer cover up its declining finances.
