The Telegraph
Since 1st March, 1999
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Foes try to foil WorldCom bid to make a comeback

Washington, Nov. 26: WorldCom Inc’s arch rivals have set their sights on the fallen telecommunications giant, hoping to undermine its financial health as it struggles to emerge from the largest bankruptcy filing of all time.

This group of competitors—which includes Pacific Bell parent SBC Communications Inc. and the other Baby Bell local phone companies—are lobbying federal regulators for new rules that would require the nation’s No. 2 long-distance company to make hundreds of millions of dollars in upfront payments before it can use the Bells’ networks to route phone traffic. Currently, WorldCom pays the Bells after it collects from its long-distance customers.

The Bells aren’t WorldCom’s only foes. The Clinton, Mississippi-based carrier also is fighting the largest labour union in the telecommunications industry and even an influential church group that has taken aim at the company.

They are all seeking to slow the financial reorganisation of the former telecom titan in a bitter campaign that analysts say is being orchestrated by the Bells, long-distance carriers AT&T Corp and Sprint Corp, and others hoping to wrest business from WorldCom and head off a bloody price war.

“There are a number of battles on a variety of issues that suggest there is an organised effort by rivals to keep WorldCom in bankruptcy as long as possible and make it as painful as possible to ensure they don’t get out,” said Blair Levin, a former chief of staff at the Federal Communications Commission who is now a telecom analyst for the Legg Mason Wood Walker Inc. investment firm.

“AT&T, Sprint and the Baby Bells,” Levin added, “are clearly better off the longer WorldCom stays mired in bankruptcy court or remains tied up with federal regulators,” who are under political pressure to protect consumers from possible service interruptions by financially troubled carriers.

The Bells deny that they are behind any organised effort to undercut WorldCom. They say their only aim is to protect themselves from the same financial ruin that has engulfed WorldCom and so much of the rest of the industry.

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