MCI WORLDCOM SHIFTS RESOURCES TO FLORIDA TEST OF BELLSOUTH

Abandons One-Sided Georgia Process That Heavily Favors BellSouth

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

ATLANTA, Ga., September 9, 1999 -- Concerned with a severely limited and one-sided process tilted in BellSouth's favor, MCI WorldCom today ended its support for testing BellSouth's ability to switch customers in Georgia to competing local phone carriers. MCI WorldCom instead will shift resources to Florida, where proposed testing more closely mirrors the successful market-opening process underway in New York.

"It's a policy decision we reach reluctantly, given our respect for the Georgia Public Service Commission, but one that is compelled by economic reality," said C.K. "Chip" Casteel, Jr., regional executive for MCI WorldCom Public Policy. "We're committed to spending the resources needed to bring local phone competition to residential customers across America, like we're doing in New York today. In the southern states, the Florida test offers a better bang for the buck than Georgia."

By law, BellSouth and the other Bell local phone monopolies must prove to regulators that they can switch customers to competing local phone carriers as easily and conveniently as they serve their own customers.

Beginning with New York, state regulators across the country have ordered the Bell local phone monopolies to undergo independent tests of their back-office ordering, installation, maintenance and billing systems. Independent testing and certification of these so-called operations support systems (OSS) is critical to opening the local phone market. In fact, the New York process -- which continues pending final state commission approval -- enticed MCI WorldCom to offer a choice for residential local phone service there on a limited basis.

In BellSouth's territory, Georgia was the first state to order tests of BellSouth's OSS. Florida regulators followed suit, ordering an independent auditing firm to develop a plan to test BellSouth's regionwide OSS systems. But the state-specific tests have taken dramatically different paths, which led MCI WorldCom to reach today's decision.

"Initially, we were pleased when Georgia showed its leadership and became the first state to make BellSouth take the test," Casteel explained. "All the signals pointed to New York-style testing, which helped make our residential market entry possible there. But it's become apparent that the Georgia test has so many fatal flaws that we now feel compelled to shift our resources to Florida, which appears to be more serious about taking the tough steps required to pry open Bell's monopoly local phone market."

The BellSouth back-office systems to be tested in Georgia are essentially the same as those in Florida. Yet the method for testing BellSouth's OSS differs significantly between Georgia and Florida.

Based on guidelines ordered by the Florida Public Service Commission, an independent auditing firm will develop the initial test plan. And unlike Georgia, Florida regulators will allow new local phone carriers to suggest revisions and test scenarios that mimic real-world customer demand for new services. The more comprehensive Florida guidelines, for example, call for the testing of advanced broadband services such as high-speed DSL (digital subscriber line) service. BellSouth's next-generation OSS, due to be implemented by next March, also will be tested in Florida.

In Georgia, however, these market-opening test parameters and open processes are conspicuously absent because BellSouth, not the Georgia Public Service Commission, essentially designed its own test. Unlike the New York process and complicating matters, competing local phone carriers have been kept largely in the dark about the progress of the Georgia test, as they are not allowed to participate in the meetings and calls between BellSouth, the testers and Georgia state regulators where issues are discussed and decided.

"The shroud of secrecy hanging over the Georgia test is one of the primary reasons behind our decision," Casteel said. "We will dive head first into the test being run in Florida, which can act as the lead state for conducting tests of BellSouth's regionwide systems. We're hopeful that Georgia will reassess its testing plans and consider coordinating with Florida to conduct these tests."

MCI WorldCom is aggressively moving to offer residential local phone service to more states like New York, where it has made more than 160,000 sales statewide. Service at commercial volumes there hinges on further actions by the New York Public Service Commission to compel Bell Atlantic to fix remaining problems with its OSS.

In Texas, MCI WorldCom continues its active participation in testing the Southwestern Bell local phone monopoly's OSS as MCI WorldCom marches toward offering residential local phone service there early next year.

In Pennsylvania, MCI WorldCom has asked state regulators to accelerate the testing of Bell Atlantic's OSS so that MCI WorldCom can offer residential local phone service there more quickly. MCI WorldCom has asked to conduct side-by-side testing with the independent auditor evaluating Bell Atlantic's OSS. Such side-by-side testing - an approach adopted by New York - helped uncover system flaws not identified by the independent test auditor.

In metro Atlanta and 88 other major markets across the country, MCI WorldCom is a leading provider of competitive local phone service to business customers. As in New York, MCI WorldCom continues to work with regulators, legislators and its competition to bring a choice for local phone service to residential customers in states where conditions are ripe.

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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