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Ebbers promises price drops but no free long-distance

Touts Sprint acquistion as a boon for new world of telecom.

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MCI WorldCom CEO Bernard Ebbers says telecom prices will continue to drop after a union of MCI WorldCom and Sprint, but thinks users should forget about the prospect of free long-distance.

Speaking before the National Press Club in Washington, D.C., Ebbers yesterday said the proposed MCI WorldCom/Sprint merger - which he is trying to get regulators to approve - will not rob users of a major service option and thus run the risk of higher prices.

That's because the amount of network capacity is growing too rapidly for any carrier to control prices, he said. "All told, intercity capacity more than doubled just in the period since we announced the MCI/WorldCom merger in 1997," Ebbers said.

But that doesn't mean long-distance tolls are going away. "Free long-distance? Never," Ebbers said in response to a question posed from the audience. Any such offers that residential and business users might think they see is "going to be a marketing scheme," he said. All carriers have costs they have to pass along and build them into their pricing, he said, making no exception for IP telephony carriers.

However, Ebbers added that long-distance pricing may soon feature a fixed-price "bucket of minutes" such as have started to appear in wireless pricing. In fact, he announced that MCI WorldCom will shortly introduce a consumer "all-distance service" in New York state that uses just such a fixed-price "bucket" for the user's choice of local or domestic long-distance.

Ebbers also announced that MCI WorldCom was adopting an "open access" policy on its networks and specifically said a combined MCI WorldCom/Sprint company would offer its large amount of fixed-wireless spectrum to competitors. That's in comparison to AT&T, which with minor exceptions has refused to open its cable networks to ISPs other than its own affiliate Excite@Home.

Ebbers also signaled that his recent break with the long-distance industry's hard line on regional Bell operating companies - specifically, his sudden support for Bell Atlantic's long-distance application in New York just before it won the Federal Communications Commission stamp of approval - was no fluke. Ebbers said he would also support SBC's application for long-distance authority in Texas if it meets the same qualifications met by Bell Atlantic. MCI WorldCom has used the fact that Bell companies are finally entering long-distance as one of the rationales for its Sprint acquisition.

As is typical of Ebbers' public appearances, the uninhibited telecom chieftain made some off-the-cuff comments that provoked laughter or gasps from the audience:

* Asked whether MCI WorldCom might next seek an international merger in 2001, he questioned why he'd even have to wait until next year. "We'll probably get in a hostile bid for Mannesmann or something like that," Ebbers quipped. German mobile carrier Mannesmann has been in a bitter battle with the U.S.-U.K. carrier Airtouch Vodafone over a possible merger.

* Asked whether carriers should be telemarketing to residential users at dinnertime, Ebbers all but denied the intrusion on family time. "Many times families don't eat around the table anymore," he said.

* Asked about MCI WorldCom's periodic customer-service problems, Ebbers simply responded that the company's financial success must prove that it's doing something right. "Customers have choices, and we're the fastest-growing company, net of acquisitions," he said. "We think that speaks volumes about our capabilities."


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