Washington, D.C. - Tim Price, MCI Telecommunications Corp.'s president and chief operating officer, has been on the hot seat as a result of MCI's core growth slowing and local market losses mounting. But his record and reputation as a super-salesman have helped him land the job as president for MCI WorldCom's main operating subsidiary. Price shared his thoughts on the pending merger last week with Network World Senior Editor David Rohde.

Q. How long will it take before you can call yourself a facilities-based local carrier that's able to advertise nationally, and not just for big cities?

A. The MCI WorldCom merger quadruples MCI's ability to offer local services throughout the U.S. MCI WorldCom will have local facilities in 102 markets. Already, MCI is in 25 of the largest U.S. markets. WorldCom, with the Brooks Fiber [Properties, Inc.] acquisition, gives us reach into many secondary areas and suburban business centers.

Q. How much can you afford to invest locally? It's always a money-losing business at first and the merged company will be under some financial pressure to perform.

A. Local is a $100 billion market, with some of the highest profit margins of any one industry. The MCI WorldCom merger gives us an immediate ability to offer services in 102 markets. It would take MCI a couple of years to get that sort of local reach on its own. Since we will be able to use the combined sales and marketing resources of the two companies, we will be able to generate more growth in this important market.

Q. Did you feel it was unfair when people bashed MCI for losing money in the local market? Did you feel vindicated by WorldCom's offer?

A. Actually, our customers have applauded our efforts to build local facilities. Policy makers have noted MCI's efforts to lead the fight to open local markets to competition. However, the costs of our investments and the problems we have had to encounter with the RBOCs have hurt short-term growth. The WorldCom merger is a testament to our employees' success and our customers' loyalty.

Q. As the former Williams Telecommunications Systems, Inc. (WilTel), WorldCom pioneered the frame relay market. But the company has they have lost market share recently. Where will frame relay and other bedrock data services stand in the merged company?

A. Frame relay and other data services are very important to MCI and WorldCom. Both companies are growing very quickly in this booming market. In fact, last quarter MCI's frame relay revenue grew 60%. We have committed a great deal of resources to developing enhancements to our frame relay service. The future is packet services, and MCI WorldCom will be very well positioned in this market with our combined Internet capabilities. Our customers will enjoy attractive pricing, global reach and excellent service.

Q. Companies undergoing mergers generally seem to become temporarily de-focused unfocused. What would stop AT&T and Sprint Corp. from going to your customers and trying to pick them off win them over if you make even one slip on product and service quality?

A. Last year, we were involved in the [British Telecommunications plc] merger process, and we still grew by double digits every quarter in our business market. It is true that a merger of the scope of MCI WorldCom will impact employees and customers, but it will have a positive impact. Remember MCI's heritage. We are entrepreneurs. We embrace change. We thrive under competitive pressure.

Q. You always said you wanted to reduce local access costs. Now you will have access to the entire MFS [Communications Company] network. How will you harness that?

A. It is clear that access costs are inflated. Consumer groups and other independent third parties have demonstrated how the RBOCs are overcharging for access. We definitely think our facilities will allow us to reduce access costs and also offer our customers more affordable local services, which will enhance revenue growth. The more local facilities we have in place, the more high-bandwidth services we will be able to offer customers. We'll use MFS facilities to bypass the RBOCs. For long distance, we'll save on both access and termination charges.

In markets where we have Class 5 [local central office] switches we'll save even more as we'll pack access facilities with [voice and data traffic].

Q. High capacity bandwidth is scarce nationwide.Between the WorldCom and MCI long distance networks, what can be done to reduce the capacity crunch and the resulting upward pressure on prices?

A. The data explosion is putting pressure on capacity. With the merger, we'll have a better opportunity to boost capacity. All the major carriers and many smaller players are investing to keep up with the demand, particularly in the Internet market. It is important to measure some of the economic issues on a broader perspective. Many businesses are saving thousands of dollars a month by deploying virtual data services and building intranet applications.