MCI looks within

Plus: Tellium is in the Zhone; and spam slammers

MCI, which is accused of rerouting customer phone calls to avoid paying access charges to competitors, last week said it has opened an internal investigation and is cooperating fully with U.S. federal investigators. But the company also maintained that disputes over access-line charges are nothing new in the competitive telecommunications industry. Federal prosecutors have begun investigating allegations by three MCI competitors – AT&T, Verizon and SBC – that the company has rerouted phone calls for more than a decade as a way to avoid paying long-distance access fees to local phone service providers. MCI is accused of routing long-distance calls through small regional phone companies in an effort to make the calls look local, thus avoiding long-distance tariffs charged by local phone companies. (Read the story)

Zhone Technologies, which makes carrier access gear, and optical switch vendor Tellium have agreed to merge. The combined company, which will be called Zhone, will offer a range of equipment – customer site access devices, service provider edge concentrators, multiplexing equipment, core trunking and voice-data gateway boxes. When completed, the stock deal would give Zhone shareholders 60% of the shares in the new company, and the merged company will boast 250 customers – including the likes of Qwest, Verizon and Bell Canada. Tellium is just the latest of a long string of acquisitions by Zhone. The company’s business plan from its founding in 1999 was to buy up other companies for the technologies Zhone needed with a $500 million bankroll. (Read the story)

Four month-old ISP Mailblocks last week unveiled Challenge/Response 2.0, the latest incarnation of its patented Challenge/Response technology designed to eliminate spam. The Challenge/Response 2.0 service collects the addresses of legitimate e-mail senders onto a master list that will take the “challenge” out of “challenge-response” for many e-mail users. Challenge/Response is similar to technology used by other ISPs, including Earthlink. (Read the story)