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February 4, 1999


By CBR Staff Writer

MCI WorldCom Inc has returned to the internet service provider business just 10 months after selling its IP network to Cable & Wireless Plc, which it did so to enable WorldCom’s acquisition of MCI to receive regulatory approval. However, with WorldCom came UUNet Technologies Inc, the world’s largest commercial ISP and it is that IP network that MCI WorldCom will be using for its new service. The company has also signed a deal with America Online Inc’s CompuServe unit to provide content and customizable home pages for MCI’s various branding partners, including eight large US airlines, offering frequent flyer incentives. MCI senior VP consumer marketing John Donoghue says using UUNet raises no regulatory issues for the company as once the internet business had been sold, the company was told that there would be no conditions on its actions going forward. The UUNet network provides MCI with 600 points of presence in the US right now, with more being added all the time, which Donoghue says is twice the number MCI had with its old dial-up service, now in the hands of C&W. MCI will charge $16.95 per month for its long distance customers and $19.95 for those that don’t use it for long distance. Both sets of customers will get 150 hours of service per month for that price. Each additional hour is 99 cents beyond the 150 and each account supports just one email address. This compares with AT&T Corp’s WorldNet dial-up service that offers 150 hours for $19.95 per month and up to six email addresses. The deal with CompuServe doesn’t appear to be exclusive, but its seems that MCI is not going to go back down the road of signing up portals to offer co-branded internet services, as it did with Yahoo Inc last year, prompting AT&T to sign up with Excite, Infoseek and Lycos before adding Yahoo as well once MCI had exited the market. As MCI senior VP internet architecture and technology Vint Cerf put it, referring to AT&T mass-partnership policy, when you’re not going anywhere, any road will do. However, Donoghue says the company does have latitude to work with others. CompuServe will sell all the advertising on the sites it is creating for MCI, and the two will share the revenues. The AOL unit is developing 20 ‘web centers’ providing shopping, personal finance, travel pages and so on. Cerf says that despite this being aimed at consumers and small business users, it will also bring large corporates in front of UUNet, which is a wholesale and commercial ISP, as more consumers means more e-commerce vendors will want to ply their wares online, he reasons. There are no plans yet to offer the service outside the US. This has been redux week at MCI, with its announcement Wednesday that it was reentering the New York local telephone market, which it exited just over a year earlier citing its inability to make any money in the market. We’re back, exclaimed Cerf yesterday.

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