SOUTHWESTERN BELL SCORES FAILING GRADE, REPORT SAYS

MCI WorldCom Offers Unique Experience To Help Deliver Choice for Local Phone Service in Texas

News Bureau Media Relations 800-644-NEWS Investors Scott Hamilton 601-460-4981

AUSTIN, Texas, August 2, 1999 - An interim report card on Southwestern Bell gives the local telephone monopoly a failing grade when it comes to dealing with its competitors, MCI WorldCom told the Texas Public Utility Commission in comments filed today. In a recent, interim report by Telcordia (formerly Bellcore), Southwestern Bell failed half of the time in a limited test of its ability to hand off phone lines to MCI WorldCom.

Although the report card gave passing grades on other portions of the test of Southwestern Bell's operations support systems (OSS), MCI WorldCom urged the Commission to look at both Southwestern Bell's failings on the test and the real world experiences of the companies that are wanting to provide residential local service in Texas. MCI WorldCom also repeated its call that the test of Southwestern Bell be more open to all participants so that new local phone competitors can understand the cause of these system problems and provide high-quality, reliable competitive local phone service in Texas.

Operations support systems are the automated, electronic database and information systems and manual processes that Southwestern Bell uses to serve its customers. In a competitive market, OSS also includes the critical computer interfaces and manual processes that allow competing local phone companies to link with Southwestern Bell's information systems to enable competitors to handle new customer service orders, installations, repair calls and billing functions.

The Telcordia interim report comes on the wake of real-world problems MCI WorldCom has experienced in delivering local telephone service using Southwestern Bell's network. Within the past year and a half, MCI WorldCom has filed with the Texas PUC two separate local service complaints - one dealing with installation of service via the "local loop,'' the "last mile'' of phone line running to a customer's location - and another dealing with service using a method known as combined network elements, or platform.

In the interim OSS report, Southwestern Bell repeatedly failed to reliably deliver the local loop, which mirrors MCI WorldCom's experiences from last year. In April 1998, MCI WorldCom filed a complaint with the Texas PUC bringing to the PUC's attention many of the same problems detailed in the interim OSS report. Simply put, Southwestern Bell continues to fail to properly hand off the line to potential competitors, resulting in a multitude of service interruption problems.

"More than a year later, here we are again - same problem, different day," said Neal Larsen, regional director for MCI WorldCom Public Policy. "If Southwestern Bell cannot seamlessly hand off the line so we can connect the customer, local competition is in serious jeopardy in Texas."

These ongoing tests of Southwestern Bell's OSS will ensure that Texans one day will be able to switch local phone carriers as quickly and conveniently as they switch long distance carriers today. MCI WorldCom, AT&T, NorthPoint and Allegiance Telecom are participating in different portions of the test. But until the Telcordia report was released on July 22, each competitive carrier was blind to the test results, denying each the technical insights that the system's failures could provide.

"What's troubling is the Telcordia report still doesn't identify the real reasons behind Southwestern Bell's failing grade," Larsen said. "It's like a doctor informing you that you're sick but won't tell you what's wrong or how to cure it.''

As the only national competitive local phone carrier to offer residential local phone service on a statewide basis, MCI WorldCom brings to the table its real-world experience in cracking open the Bell Atlantic-New York local phone monopoly. Since launching competitive local phone service there last December, more than 120,000 consumers have switched to MCI WorldCom.

"We may be a new kid on the block for local phone service, but we're learning more and more each day and want to share that knowledge to break open the Bell monopoly in Texas," Larsen explained. "That's why it's imperative that the Commission learn from our unique experience and use real-world market knowledge to help local phone competition succeed in Texas."

Because that experience has been so valuable in making local competition work in New York, MCI WorldCom also urged the Texas PUC to also take this type of information into account in determining whether Southwestern Bell's OSS works. In New York, MCI WorldCom offers residential local phone service using combined network elements leased from the Bell Atlantic-controlled local telephone network. In Texas, Telcordia is testing AT&T's platform interface to Southwestern Bell's OSS.

Still, MCI WorldCom has horror stories of its own to tell after attempting to serve residential local phone customers in Texas using combined network elements leased from Southwestern Bell. In a Houston test a year ago, 85% of the customers lost dialtone, experienced cross-talk, had their directory assistance listings disappear and more, which again prompted MCI WorldCom to file a complaint with the PUC against the Bell monopoly.

"Our practical business and technical experiences can only help bring this process to a successful close. But the process must be refined to do so," Larsen said. "MCI WorldCom is prepared to work hand-in-hand with the Commission and all parties to help bring about real competition and real choice in Texas for local phone service."

MCI WorldCom is a global leader in communications services with 1998 revenues of more than $30 billion and established operations in over 65 countries encompassing the Americas, Europe and the Asia-Pacific regions. MCI WorldCom is a premier provider of facilities-based and fully integrated local, long distance, international and Internet services. MCI WorldCom's global networks, including its state-of-the-art pan-European network and transoceanic cable systems, provide end-to-end high-capacity connectivity to more than 40,000 buildings worldwide. MCI WorldCom is traded on NASDAQ under WCOM. For more information on MCI WorldCom, visit the World Wide Web at http://www.wcom.com.

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