[BT/GTE/MCI]
<<<Did you see this earlier? I somehow missed it till now.
LONDON, Oct 20 (Reuters) - BT British Telecommunications and GTE Corp are considering a joint bid to defeat the rival attempt by WorldCom Inc to take over MCI Communications , the Sunday Times reported.>>>
Hi Pat,
Here's part of the program to this heavyweight title fight!
<<''From the Internet point of view, an MCI/BBN/GTE combination can be extremely strong in the area of developing new value-added services,'' said Rebecca Wetzel, director of Internet services at TeleChoice, Inc., a Verona, N.J.-based consulting firm. ''MCI's high-speed backbone and BBN's smarts at developing next-generation services could be a very powerful combination,''>>
<<And GTE's trials of asymmetric digital subscriber line (ADSL) lines are among the most extensive being done by any U.S. local carrier.>>
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GTE rains on Bernie's parade
Local giant paints nice picture with MCI, but Bernie Ebbers' WorldCom may be better fit.
By David Rohde and Denise Pappalardo
Network World, 10/20/97
The Herculean effort to cobble together a powerful end-to-end network and provide rich Internet capabilities last week took center stage, as local telephone powerhouse GTE Corp. put in a bid to buy MCI Communications Corp.
Observers said GTE's $28 billion cash offer for MCI, competing with WorldCom, Inc.'s recent $30 billion stock offer, probably spelled the end for the planned global supercarrier merger between MCI and British Telecommunications plc (BT).
It also opened the door to a bidding war between WorldCom, GTE and possibly others. Partisans for GTE, which recently modernized itself by acquiring Internet provider BBN Corp., said a GTE/MCI merger would provide a powerful counterweight to the regional Bell operating companies that are bucking to enter the long-distance market.
But most observers believe a WorldCom/MCI combo makes the most sense for corporate users with operations in large urban and suburban areas.
''GTE has so many of their own fish to fry, it's hard to understand why this would be a good merger,'' said Dan Taylor, senior analyst at Aberdeen Group, Inc., a consultancy based in Boston. ''GTE does not have the best reputation for local service, and they are still trying to integrate BBN into their business.''
A GTE/MCI merger could be a boon for users who have large operations in Tampa, Fla., Plano, Texas and Las Vegas or one of the many other markets GTE serves around the country.
Best broadband bet
But the best bet for integrated broadband end-to-end services still seems to come from WorldCom. Its acquisition last year of MFS Communications Company, Inc., combined with its pending acquisition of Brooks Fiber Properties, Inc., gives it close to 75 local markets reaching city centers as well as fast-growing, densely-populated suburbs with new employment centers.
''They have much better routes reaching the new office parks and campus environments,'' said Robert Rosenberg, president of Insight Research Corp., a telecom market research firm in Parsippany, N.J.
As for BT, it may just want out of this bidding war. Late last week BT waived a provision in its year-old merger agreement with MCI that had prevented MCI from discussing offers with GTE and WorldCom. And WorldCom is not expected to shy away from a fight for much-coveted MCI assets, such as its Internet backbone and additional investments in local facilities.
''I think [WorldCom CEO] Bernie Ebbers has a few more dollars in his pocket,'' Rosenberg said.
The Cisco connection
GTE still has quite a number of attributes to promote to MCI customers, management and shareholders.
''From the Internet point of view, an MCI/BBN/GTE combination can be extremely strong in the area of developing new value-added services,'' said Rebecca Wetzel, director of Internet services at TeleChoice, Inc., a Verona, N.J.-based consulting firm. ''MCI's high-speed backbone and BBN's smarts at developing next-generation services could be a very powerful combination,''she said.
Another factor enters into the picture: carrier network design. Both MCI's and GTE Internetworking's Internet networks primarily are made up of Cisco System, Inc. routers, said a GTE Internetworking executive who wished to remain anonymous. By contrast, the network owned by WorldCom Internet subsidiary UUNET Technologies, like those of many large ISPs, is primarily based on frame relay switches. It would be much smoother to join two networks that are based on the same technology from the same vendor.
Based on plans UUNET has for some pending acquisitions of its own, it most likely would not marry MCI's network with its existing frame relay network anyway. UUNET plans to operate ANS Communications, Inc., CompuServe, Inc. and GridNet International networks separately, migrating to a single backbone some time in the future. This would keep all of the existing network access points intact.
Ownership of transport facilities is another differentiator between GTE and MCI, but GTE is working to close the gap. While BBN, now known as GTE Internetworking, currently is not using its own transport facilities, it will next year. When GTE bought BBN it also purchased 13,000 miles of fiber optic capacity from Qwest Communications Corp. (NW, May 12, page 8). The fiber network still is being built.
In the meantime, GTE Internetworking is using long-haul transport facilities from three major services providers, one of which is MCI. That leasing cost could be cut if GTE owned MCI.
Last week the quest to become a bigger Internet player drove much of GTE's actions, while the search for local telecom facilities to provide Internet and private WAN access took on even more urgency just before GTE made its bid.
Earlier in the week, a panel of federal judges for a second time overturned Federal Communications Commission rules designed to help new carriers get into the local telephone business even if they do not own a local network. The court ruled that RBOCs have the right to force competitors to lease capacity on RBOC switches and local loops one at a time rather than in a package.
Favoring WorldCom
The decision against the FCC rules means carriers such as AT&T, with few local networks of their own, are going to have a tough time. It favors a WorldCom deal with MCI, since MCI needs to connect its 22 Synchronous Optical Network rings in city centers with the large metro-area rings and spurs built by WorldCom in order to provide metropolitan coverage, Rosenberg said.
Still, GTE may have an edge because of its experience in provisioning certain kinds of data services. Because it is authorized to offer long-distance service, it has an advantage over RBOCs still shackled by regulators' reluctance to approve their long-distance entry. For example, GTE offers both local and long-distance frame relay service at 56K bit/sec to 45M bit/sec. It offers special construction ATM services in 14 states. And GTE's trials of asymmetric digital subscriber line (ADSL) lines are among the most extensive being done by any U.S. local carrier.
Users since June have been expecting GTE to announce general DSL services in three states, though expected announcements at recent trade shows have failed to materialize.
The blame is being placed on indecision about whether the service should be offered through the regulated local carrier, GTE Network Services, or GTE's newly formed competitive local exchange carrier, GTE Communications Corp.
Senior Writer Tim Greene contributed to this story.
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And.......
MCI Speeds Microsoft's Internet Presence
By a staff reporter
20-OCT-97
MCI Communications Corp. will build a custom pipe to meet data speed demands of software giant, Microsoft Corp.
ÿÿÿÿÿÿ Microsoft needs Internet data speeds of up to 622Mbps (OC-12) from its new facility in Canyon Park, Washington, and MCI's advanced backbone is set to provide the first commercial OC-12 connection for the company.
ÿÿÿÿÿÿ The new center opened last month and will house all Microsoft's servers for its public sites, including MSN and MSNBC.
ÿÿÿÿÿÿ Initially, the center will be connected to MCI's Internet backbone, via Cisco System's 7500 routers and Fore ATM switches, while the two companies Cisco's 12000 Gigabit Switch Router. |
