The drama continues. The Wall Street Journal reported this morning that Verizon (NYSE:VZ) sweetened its offer for MCI (NASDAQ:MCIP) to $23.50 a share, and that MCI's board acted quickly to accept the revised deal.

Let's examine what this means for a moment. In effect, MCI is saying that the risk premium for going with Qwest (NYSE:Q) is greater than 11% -- roughly the delta between Verizon's $23.50-per-share bid and Qwest's $26-per-share offer. And that does make some sense, especially if you measure risk in terms of the likelihood of Qwest filing for bankruptcy protection after absorbing MCI.

Indeed, a back-of-the-napkin estimate shows Qwest's trailing 12-month owner earnings at negative $400 million. That alone is bad enough, but it gets worse when you mix in the ailing telco's annual interest expense, which equaled more than $1.5 billion over the past year. Qwest has only $1.7 billion in the bank and more than $17 billion in debt on the books. So this is a no-brainer, right?

Not so fast. Qwest's offer is still richer for shareholders. Getting within spitting distance of a superior offer typically shouldn't be enough. But, in this case, it is. And that's not because of Qwest's failings, but MCI's. MCI simply may not be strong enough to help Qwest out of its hole. More back-of-the napkin math illustrates why.

Data from MCI's recently filed 10-K and Yahoo! Finance show a combined firm might generate a little more than $50 million in positive owner earnings. Yet net interest paid for 2004 would have come close to $2 billion. That's a massive deficit, at least some of which would have to have been covered by the $7.2 billion the combined firm would have had in the bank.

Forget the insults flying back and forth and forget the hyperbole. In the end, this debate is over which firm will be able to pay the bills and finance growth for shareholders. Though Qwest and MCI, as the smaller conglomerate, would have more headroom to grow, the downside risk presented by debt is simply too great. The time has come to end MCI's acquisition, Qwest.

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Fool contributor Tim Beyers gave up on MCI after it kept charging him for phone service he wasn't getting. What's your take on the MCI-Verizon deal? Is Qwest getting short shrift? Are we giving Verizon too much credit? Share your thoughts with other Fools at the MCI, Qwest, and Verizon discussion boards. Tim didn't own shares in any of the companies mentioned in this story at the time of publication. You can find out what's in his portfolio by checking Tim's Fool profile, which is here. The Motley Fool has a disclosure policy.