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"Everybody said we were crazy," recalls William G. McGowan, 57, "but I didn't come from the telephone industry, so I didn't have any preconceived notions. What seemed impossible to them did not seem strange to me. We looked over the papers in the Federal Communications Commission library, and we couldn't find anything that said AT&T had the right to keep a monopoly in telephone service."
This was interesting to McGowan because he managed a company, Microwave Communications of America (now renamed MCI Communications), that had a rival technology to send long-distance messages by microwave. When AT&T balked at carrying these messages to their final destination over local wires, McGowan went to court. He also persuaded the Justice Department to start antitrust proceedings against AT&T.
After six years of litigation, McGowan won in 1980 a judgment of $1.8 billion in damages, the largest in history, and the Government's antitrust action ended in a consent decree that last year splintered the telephone monopoly into seven regional shards. Is McGowan satisfied? Not a chance. There is a new trial scheduled this spring on the amount of damages, and McGowan plans to argue that the size of his original claim against AT&T was based on a miscalculation; that AT&T really should pay him not $1.8 billion but $5.8 billion.
Chutzpah, one might say, but it comes naturally to McGowan. The son of a railroad union organizer in the coal country of eastern Pennsylvania, he worked his way through college, attended Harvard Business School on the G.I. Bill, then went to work for Mike Todd, the Broadway and Hollywood showman. McGowan subsequently launched several firms in electronics and computers, retired rich at 39 and took a trip around the world. Bored, he moved into the field of venture capital. That was how he discovered a nearly bankrupt little company that was trying to start microwave phone service between Chicago and St. Louis. For $50,000, McGowan bought half of it; his shares are now worth about $50 million. "Challenging the monopoly had one irresistible element," McGowan says. "It had never been done before."
One key to McGowan's success is that he moved the company's headquarters to Washington, for he knew that the battle would be primarily a matter of lobbying. "I didn't concern myself with the technology, just the regulation of the industry," he says. His own managerial style is fairly deregulated. He hates paperwork. "Most entrepreneurs fail, after they first succeed, because they can't really delegate responsibility," he says. "I'm always on the lookout against people who try to foist the authority for a decision back on me."
A confirmed bachelor who looks a bit like Bert Lahr's Cowardly Lion, McGowan lived in rented apartments for most of his life, but four years ago he bought a house in Georgetown and converted it into a revealing kind of private playland. Pushbuttons control all manner of gadgets: lighting panels on every floor, a laser-disk stereo system that can be turned on by infrared signals from any room. And in the back patio, a Jacuzzi whirlpool bath stands surrounded by fake boulders. McGowan admired the props in the polar bear cage at the National Zoo and ordered some for himself. The whole place suits the style of the man who, on once being asked what MCI stood for, said, "Money coming in."
Bob Pittman