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MCI > WCOM > Verizon
Industry > Backbone > WorldCom, MCI, UUNet  :: Verizon
| WorldCom MCI Merger | WorldCom Sprint Merger | Layered Model Regulation | NSFNET |

Verizon /WorldCom / MCI / UUNet

"WorldCom operates 30 percent of the bandwidth on the 20 largest U.S. Internet backbone routes-more than the next four providers combined.  WorldCom connects over 3,400 networks throughout the world-Sprint and AT&T each connect less than half as many.  In 2001, WorldCom accounted for at least 30 percent of the wholesale U.S. backbone access market-three times more than its largest rival." - Telegeography, WorldCom Controls the Most Internet Bandwidth, Connections, and Revenue (July 10, 2002)

"10. WorldCom's UUNET subsidiary is by far the largest provider of Internet backbone services in the world, whether measured by traffic or revenues. UUNET's backbone network extends from North America to Europe and Asia, and serves more than 70,000 businesses in 114 countries. UUNET offers a wide range of retail and wholesale Internet backbone services, including "dial-up" (i.e., through shared modem banks) and dedicated Internet access (i.e., through direct connections to the customer), as well as value-added services such as Internet protocol virtual private networks ("IP/VPNs"), website hosting, collocation at data centers, applications hosting, and Internet security services.
       32.  WorldCom's wholly owned subsidiary, UUNET, is by far the largest Tier 1 IBP by any relevant measure and is already approaching a dominant position in the Internet backbone market. Based upon a study conducted in February 2000, UUNET's share of all Internet traffic sent to or received from the customers of the 15 largest Internet backbones in the United States was 37%, more than twice the share of Sprint, the next-largest Tier 1 IBP, which had a 16% share. These 15 backbones represent approximately 95% of all U.S. dedicated Internet access revenues. UUNET's and Sprint's 53% combined share of Internet traffic is at least five times larger than that of the next-largest IBP. The Herfindahl-Hirschman Index ("HHI"), the standard measure of market concentration (defined and explained in Appendix A), indicates that this market is highly concentrated. The HHI in terms of traffic is approximately 1850; post-merger, the HHI will rise approximately 1150 points to approximately 3000. (Note: Throughout the Complaint, market share percentages have been rounded to the nearest whole number, but HHIs have been estimated using unrounded percentages in order to accurately reflect the concentration of the various markets.)"
-- DOJ Complaint re WCOM Sprint Merger

MCI

1968 Microwave Communications of America was established by William G. McGowan . It was renamed as MCI three years later. [Beyond the Ionosphere, Ch 22] MCI's plan was to build a series of microwave relay towers between Chicago and St. Louis, which would provide a radio service to trucks and along the Illinois waterways.

In 1969, the FCC came out with the Carterphone decision, which let third parties attach equipment to the AT&T network. This permitted MCI to attach its radio service to the AT&T network.

Docket 16509:

  • Dec. 1963: Petition to operate a micowave service between Chicago and St Louis, and interconnection with the AT&T network, filed
  • 1967: Common Carrier Bureau Hearings on the MCI application
  • 1968: Full FCC hearing
  • August 14, 1969 the FCC approved MCI's license for operation. (4-3 vote)
    • This is noted as a huge change in FCC policy, opening the telecom market to competition

1971 Specialized Common Carrier Services decision stating that common carriers could offer only specialized services. FCC Docket 18920, "Specialized Common Carrier Services," First Report and Order, 3 June 1971, 29 FCC 2d, 872.

1972: MCI initiates service

  • Legal battle with AT&T was said to have cost $10m. Construction of the network was said to have cost $2m. Sterling, Bernt, Weiss, Shaping American Telecommunications, p.133 (2006)

1972: MCI became a publicly traded company.

1974: MCI and DOJ initiate antitrust lawsuits against AT&T.

1974: MCI launches Execunet (forerunner of MCI's Long Distance service)

  • 1975: FCC orders MCI to cease Execunet
  • 1977: Court overturns FCC decision
  • 1978: FCC rules that AT&T did not have to interconnect with Execunet

1978: Court again "angrily" overturns FCC interconnection order as an attempt to circumvent its earlier order

MCI installed Single Mode Fiber Optic Cable between NYC and WDC which went into operations in 1984.

MCI merged with WCOM in 1997.

1999 WCOM sought to merge with Sprint, but was refused.

2005 WCOM was acquired by Verizon.

The joke is that in its early years, MCI had more lawyers than land lines or that it was "A law firm with an antenna on the roof".

Papers

Books

  • Cantelon, Philip L. (1993). The History of MCI : 1968-1988, The Early Years. Dallas: Heritage Press.

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