MCI May Sell Internet Business to Speed WorldCom Merger

MCI Communications Corp. is considering selling a large part of its Internet business to ease concerns of regulators that the company’s planned $37-billion merger with WorldCom Inc. would be anti-competitive, sources close to the negotiations said Tuesday.

Consumer groups and industry rivals say the merged company would control as much as 60% of the market for carrying data on the Internet’s main trunk lines, or “backbone.” The Justice Department is investigating the deal and is focusing on the merger’s impact on competition in the Internet business.

Although MCI and WorldCom dispute those estimates, MCI began looking for buyers for its backbone business a few weeks ago. The combined company would focus on growing WorldCom’s Internet business, which is slightly larger than MCI’s.

MCI and WorldCom officials declined to comment Tuesday.

Washington-based MCI has been in discussions with several telecommunications firms, including British Telecommunications, GTE Corp., IXC Communications Inc. and Williams Cos., although it apparently has narrowed the field of would-be buyers, the sources said.

MCI expects to get $400 million to $500 million for the division, they said.

The company is likely to retain its consumer Internet access business, because Jackson, Miss.-based WorldCom does not provide such a service.

The Federal Communications Commission and the European Commission are also reviewing the MCI-WorldCom merger deal, which would be the largest telecommunications buyout in history.