MCI May Sell Internet Business
.c The Associated Press
WASHINGTON (AP) - MCI Communications Corp. may sell the rest of its Internet business to a British company to help get U.S. antitrust approval of a planned merger with WorldCom Inc.
London-based Cable & Wireless agreed to buy MCI's wholesale Internet in May and industry sources said Monday it is now the leading contender to buy the rest of MCI's retail Internet business.
The retail assets could bring as much as $2 billion, according to industry analysts.
Last week, European regulators approved the $37 billion WorldCom-MCI merger on the condition that MCI sell its entire Internet business.
The European Union's antitrust regulators action was expected to clear the way for the merger's approval by the U.S. Justice Department, which has been working closely with European regulators.
MCI is expected to publicly disclose the name of the buyer of the its Internet retail assets after the Justice Department acts, which could happen this week, the telecommunications sources said.
The Federal Communications Commission also must give its approval for the WorldCom-MCI merger to be consummated. The FCC could make a decision on the merger next month.
Cable & Wireless in May said it would buy MCI's Internet backbone business - all the switches, routers and other equipment that comprise the network - as well as contracts with 1,300 Internet service providers for $625 million.
Now the sources, who spoke on condition of anonymith, said MCI is expected to sell to Cable & Wireless contracts for all of its business and residential Internet customers - a move that would get MCI out of the retail Internet business.
''It is better for MCI to sell the Internet assets in one chunk because it instantly creates another Internet competitor, which would make for a more competitive marketplace,'' said Jeffrey Kagan, of the Atlanta-based consulting firm, Kagan Telecom Associates.
AT&T Corp., PSINet Inc. and IXC Communications also have been interested in buying MCI's Internet business, analysts said.
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