Chicago - Bert Roberts, chairman of MCI Communications Corp., gave a restrained keynote yesterday at Spring Comdex here, but did not hold back his opinions during a question-and-answer session afterward in which he criticized rival GTE Corp. and the Federal Communications Commission's access fee structure.
Roberts got his opportunity when asked "what's the problem?" with MCI's proposed merger with WorldCom, Inc. that has prompted close regulatory scrutiny.
While such scrutiny is routine for such major acquisitions, Roberts said he expects that the MCI-WorldCom deal will close in the coming months and that both companies have been providing information and cooperating with regulators. WorldCom stunned the industry when it announced last October that it had made an offer of $30 billion for MCI. Since then, Roberts said, William Barr, GTE executive vice president and general counsel has embarked on a "disinformation campaign" to stymie the merger.
"If there is a problem in the industry, GTE will go to any length to stop the merger," Roberts said of the company, which is big in local markets nationally.
Barr, a former attorney general in the administration of U.S. President George Bush, has personally appealed to various state attorneys general regarding the merger. Attorneys General Mike Earley of Virginia and Charlie Condon of South Carolina have asked for a thorough antitrust review of the proposed merger in their states.
Roberts also had scathing words for the FCC and its universal access fee structure, which requires large telcos such as MCI to pay into a fund used to wire schools, libraries and remote areas for enhanced services such as Internet access. Internet service providers are not required to pay into the fund nor do they pay local access fees to local telcos for use of their infrastructures, which long-distance carriers like MCI must pay.
The FCC in a report to the U.S. Congress on April 10 said it was not going to call for ISPs to pay universal access and local access fees, but might reclassify ISPs in the future so that they are required to ante up.
Calling universal access "a hot potato," Roberts said MCI independently has made donations to schools and libraries to help them get online. "Government bureaucracy is worse," he said of the fee structure, which was altered last May. "The system as it was put in place is wrong."
He proposed a better method to achieve nationwide wiring of schools, libraries and rural areas: "If government wanted to accelerate that process, do it through tax incentives."
Meanwhile, MCI will pass additional costs from the current fee structure on to users or regional bell operating companies, Roberts added.
The MCI chief, who will be chairman of the merged MCI-WorldCom if that deal goes through, was reluctant to discuss specifics of AT&T's recent network outage.
Before answering, Roberts said companies that have split telecommunications services among multiple data-circuit vendors tend to cope with outages the best. That way, when one vendor has a crash, not all telecommunications are lost.
He also said MCI has worked on various issues related to its network, such as redundancy and switching, to avoid a major outage. MCI engineers were asked to review AT&T's problem to ascertain if MCI faces the same risks.
While Roberts said he would not comment specifically on the AT&T frame relay network failure, he said cryptically, "I don't think we have the same problem."
