MCI plans to target Baltimore

March 06, 1995|By New York Times News Service

WASHINGTON -- MCI Communications Corp. plans to establish a full range of local telephone services to business customers in Baltimore and nine other big cities by the end of this year, in what will be the biggest assault yet by a long-distance company on the local Bell companies.

MCI, based in Washington, said its primary focus would be on business rather than residential customers, at least initially. Smaller companies that have offered such services have been able to offer business customers sharply lower rates.

In the long term, MCI is likely to go after the residential market as well.

The MCI service, which will compete with Nynex and several smaller companies, is expected to be available later this year.

Last year, MCI announced its intention to enter the local telephone business, and it committed $2 billion to a new unit called MCI Metro.

Maryland telephone regulators voted in October to approve MCI's Oct. 4 petition to go into competition with Bell Atlantic Corp.

But until now, MCI, the second-largest long-distance company, had refused to discuss specific commitments and had hedged much of its plan on the need for policy changes by state utility regulators.

The new plan, to be announced today, outlines specific plans to compete in local telephone markets in 1995. Under the plan, MCI will offer ordinary local service, high-speed private lines used for data transmission or private corporate networks, and the ability to bypass the local phone company in reaching long-distance carriers.

Besides Baltimore, the company plans to offer service in Atlanta, Boston, Chicago, Dallas, Detroit, Houston, Los Angeles, Miami, New York and Hartford, Conn.

In offering business customers an alternative to Nynex Corp., MCI will join two smaller companies, MFS Communications and Teleport Communications Group, that already provide the kind of services MCI anticipates.

MFS also has received regulatory approval in Maryland to offer local phone service.

Robert Atkinson, senior vice president at Teleport, which is owned by three cable television companies and is teaming with Sprint Corp. to offer an array of local services, said MCI's move merely reinforced a trend already under way.

"We've been providing full-blown local exchange service in New York since the middle of last year," he said last night.

But Mr. Atkinson cautioned that neither his company nor MCI could yet compete for ordinary telephone customers, because no local telephone company had worked out a comprehensive set of interconnection agreements with rivals.

Nynex has gone further than most telephone companies to open its network, even working out agreements under which customers can keep their numbers if they switch to a rival.

But Mr. Atkinson said the business terms still made it difficult to serve small customers.

MCI officials said they had signed contracts to buy $600 million of switching and transmission equipment during the next three years for their local venture from Northern Telecom and Siemens Stromberg-Carlson. During the next year alone, MCI plans to invest $500 million to construct, operate and market local services in the initial 10 cities.

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