MCI WorldCom jumps back into Net biz

MCI WorldCom's exit from offering Internet service didn't last long. Not quite seven months after US regulators forced MCI to sell off that part of the business as a condition of merger approval, the company announced yesterday that it is returning to that market.

"We're back," said Vint Cerf, MCI WorldCom senior vice president of Internet architecture and technology.

MCI WorldCom Internet is available now for $US16.95 for customers who use the company for long-distance service, and for $19.95 for other users. The service, aimed at consumers and small businesses, involves an alliance with CompuServe, an affiliate of America Online (AOL), which will offer portal, Web hosting and instant messaging services.

The affiliation raises obvious questions about how Internet service providers can manage to work together when they compete for the same users. Officials did a bit of a side-step to such queries.

"We look at this as an interesting step where you see companies that might be perceived as being in competition reaching synergies," said Audrey Weil, CompuServe chief operating officer.

Cerf offered to jump in to clarify matters, doing so, he said, "even though I know beans about marketing".

Such deals between competitors are likely to occur more in the future of what Cerf termed "a very peculiar business" of the Internet. Different companies can offer different advantages to each other and that can push them past viewing each other only as competitors, he said.

The deal between MCI WorldCom and CompuServe is not exclusive, Weil said, pledging, "we're going to be supporting this site with everything we can do". Officials refused to reveal financial terms of the deal.

The Internet service will use the backbone network of UUNet, a unit of MCI WorldCom. It will be better than the previous Internet service offered by MCI -- which had to sell that part of its business before regulators approved its merger with WorldCom last July -- because the company has 600 points of presence (POPs), twice what MCI had before.

The service is easier to register for than the previous service and will offer customised, rather than static, World Wide Web pages to users, said John Donoghue, MCI WorldCom senior vice president of consumer marketing. The new service also will offer frequent-flier miles to consumers through a deal MCI WorldCom has with eight leading US airlines.

Asked if the new service is intended to be yet another means for MCI WorldCom to compete with AT&T, Donoghue said,:"We have always intended to drive their market share down to zero."

Added Cerf: "Competition? What competition?"

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