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MCI, BT to act in Concert

MCI is expected to announce the completion of a major step in a bid to create the world's biggest private backbone, company executives said.

MCI Telecommunications (MCIC) is expected to announce on Monday the completion of a major step in a bid to create the world's biggest private backbone, company executives said today.

The company will report that it has finished a five-month project to increase the capacity of its Internet backbone by a factor of four. Executives disclosed the plan during an interview scheduled in the wake of British Telecom's proposed buyout of MCI for $20 billion this past week. The executives said that a key reason for pursuing the biggest global telco merger was a desire to link the backbones of the two giants, which together will represent 43 million customers in 72 countries.

"This is a big rock that will change the telecommunications industry," said Fred Briggs, chief technology officer of Concert, the new name for the combined BT-MCI company. He added that he expects more mergers to follow, resulting in "four, five, or six" global telco giants.

The newly formed company is now outlining an aggressive plan to launch advanced communications services as well as expand established local and long distance services. The company's Internet and intranet strategy largely will focus on the business customer, but also will address consumers in the fast-growing European market.

The companies also are laying plans to expand their telco empire to Asia with a rollout of Concert Plus in the Far East in the first quarter of next year.

Briggs remains optimistic that the deal will win regulatory approval within 10 to 12 months, despite potential opposition from the likes of AT&T, not to mention close regulatory scrutiny.

MCI is already also planning major expansions in video on demand, e-commerce, and Internet gaming services in a bid to capitalize on the convergence of telecommunications, cable television, and entertainment.

The plans on the drawing board include the following:

--The launch of a gaming service, dubbed "Wireplay," in the United States next year. The service, already deployed in Europe, will allow consumers to play games across the network for a fee.

--Pilot tests next year for XDSL technology, providing high-speed Net access in the United States and Europe.

--Accelerated efforts to tap the intranet market with a service called Concert Plus. The service will compete with the personal broadcast software PointCast.

--A collaboration between MCI and Rupert Murdoch's News Corporation to launch an entertainment-based digital broadcast service in the United States next year. It will provide "hundreds of channels and pay-per-views movies to the home," Briggs said.