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To: Ray Burke who wrote (34279)	5/29/1998 9:22:00 AM
From: ksuave	Respond to of 41046

MCI to Sell Its Wholesale Internet Unit By SETH SCHIESEL MCI Communications Corp. announced Thursday that it had agreed to sell its wholesale Internet business to Cable & Wireless PLC for $625 million in cash. The sale was widely perceived as a bid to placate antitrust regulators who are reviewing the planned $37 billion acquisition of MCI by Worldcom Inc. But it was also a reflection of just how testy relations between MCI and the Justice Department have become. Along with the European Commission, the Justice Department is evaluating Worldcom's acquisition of MCI primarily with an eye toward the power a combined MCI Worldcom would wield in the Internet industry. Worldcom's Uunet unit is the largest Internet service provider, and MCI has a significant presence in cyberspace. Ever since it was reported last week that MCI had solicited bids in the $500 million range for the Internet unit, it has been clear that regulators are demanding that MCI and Worldcom sell part of their combined Internet business as a condition of receiving approval for their merger. But executives involved in Thursday's announcement said the deal between MCI and Cable & Wireless had been sealed even before news of the solicitation emerged. The executives said MCI had explained the deal to lawyers and economists at the Justice Department and had waited for the officials to indicate whether the sale to Cable & Wireless would allay the government's antitrust concerns. That indication was never given. Instead, Justice Department officials told MCI that they could not evaluate the effect of the Cable & Wireless deal without discussing it with MCI's competitors, the executives said. That concept was unacceptable to MCI, so the company went ahead and announced the deal Thursday. The Justice Department said Thursday only that it was continuing to consider the Worldcom-MCI merger and that it would include the sale to Cable & Wireless in that consideration. MCI, which was built on confronting regulators, used Thursday's announcement as a pre-emptive strike against the Justice Department. The company has appeared to grow increasingly frustrated with the department's handling of the merger. "They have explicitly refused to explain their reasoning about the Internet backbone issues," a person close to Thursday's deal said. But the Justice Department did explain one important thing. Department officials told MCI that any sale of Internet assets to companies that already had a big presence in the Internet business would fail to alleviate the antitrust concerns, people close to the talks between the department and MCI said Thursday. The Justice Department saw MCI's willingness to sell part of its Internet business as an opportunity to increase competition generally in the cyberspace industry. The department's thinking held that selling MCI's Internet units to established carriers would do little to shake up the competitive landscape. As big Internet companies, GTE Corp. and Sprint Corp. were essentially anathema to Justice Department officials, the people close to the talks said. AT&T Corp., which is trying to join the top rank of Internet providers, "was in a gray area," one person said. None of the three were invited to bid for the unit that Cable & Wireless agreed to buy. Executives close to Thursday's announcement said that MCI would have liked to explore selling the wholesale unit to British Telecommunications PLC, its erstwhile merger partner, but they said that MCI was fearful that such a deal could have appeared improper. Worldcom has already agreed to pay British Telecom more than $7 billion in cash for its stake in MCI when Worldcom's acquisition of MCI is completed. For MCI's purposes, however, Cable & Wireless was in some ways the perfect partner for Thursday's deal. The company, based in London, is already a big long-distance carrier in the United States and an even bigger telecommunications presence overseas; so the companies can argue that MCI's Internet assets are going to a company that can use them. But Cable & Wireless is not so big that it could threaten MCI's business. And, as a bonus, Cable & Wireless is a European company, which MCI could hope would help assuage European regulators. AT&T declined to comment on the deal Thursday. Sprint and GTE described it as inadequate to remove antitrust concerns. The unit that MCI agreed to sell to Cable & Wireless provides wide pipes to cyberspace to more than 1,300 smaller Internet service providers. GTE was disappointed that MCI did not agree to also sell its unit that provides Internet service to residential customers and big businesses. GTE has been pushing Worldcom to sell Uunet, but Worldcom, not surprisingly, has refused. Friday, May 29, 1998 Copyright 1998 The New York Times

To: Ray Burke who wrote (34279)	5/29/1998 9:49:00 AM
From: vic klimpl	Read Replies (1) \| Respond to of 41046

Ray, Good point.From recent events it is clear that with a few more corp. developments we could be looking at north of 15 by midsummer and much higher by late fall.Remember that it was announced publically on thelatest management updates that ftel is working out the last details over the next month or so on the equipment side.Lucent announced that they will have a system by spring of next year. We may have what I call a "turnkey internet telco" by sometimes in july.OK flippers or does the mms power scare you off at this point? they scare the heck out of me.all buys todat and they drop it yet again?