Mike Milken helped MCI Chairman Bill McGowan, above, create a revolutionary fiber-optic network and create 50,000 jobs.

In the late 1960s, MCI Communications Corporation was a gutsy little company with 11 employees competing against an industry colossus. AT&T had a AAA credit rating, a strong balance sheet and a 98-percent market share.

"Most people told me it couldn’t be done," said MCI Chairman Bill McGowan. "Others even said it shouldn’t be done – that AT&T was a natural monopoly and it was against the public interest to have competition in long-distance telephone service."

Facing a seemingly invincible competitor, MCI management spent the better part of a decade devoting a major portion of its time to raising capital. By the early 1980s, with a landmark court decision in its favor, the company decided to build an advanced fiber-optic network that would require substantially larger amounts of capital.

In 1983, in conjunction with Milken and Drexel Burnham Lambert, the company issued a hybrid security — $1.1 billion in 10-year bond warrant units with a coupon substantially below what U.S. Treasury bonds were paying. At the time, this was the largest debt financing in history. It allowed company management to put an extra $500 million in cash on the balance sheet so that customers, suppliers and investors would know they were financially strong.

The immediate effect was that management no longer was forced to spend so much time raising capital. Over the next 10 years, their time was better spent on building the revolutionary fiber-optic network that would change the face of communications in America. The results were impressive. By 1990, MCI had become the nation’s second-largest telecommunications company, establishing a fiber-optic network spanning more than 46,000 miles. The company offered more than 50 services in more than 150 countries that included voice, data and telex transmissions, MCI Mail and MCI Fax.

In total, Milken and Drexel raised $2.6 billion for MCI. By 1997, MCI had created more than 60,000 jobs for American workers, the quality of long-distance phone calls had improved considerably and - contrary to critics’ charges - the cost of telephone service dropped dramatically.

[Although two decades later, MCI faced major problems under new management following its acquisition by another company, it was a remarkably agile and successful competitor in the 1980s when the McGowan-Milken team fostered its growth.]