Roanoke Times
                 Copyright (c) 1995, Landmark Communications, Inc.

DATE: FRIDAY, December 31, 1993                   TAG: 9312310118
SECTION: NATIONAL/INTERNATIONAL                    PAGE: A-1   EDITION: METRO 
SOURCE: The Washington Post
DATELINE: WASHINGTON                                LENGTH: Medium

MCI TO GO LOCAL

Washington-based MCI expects to invest as much as $1.5 billion to build local phone connections that would permit business and residential customers to bypass local phone company lines, sources close to the company said.

Initially, such networks would enable callers to connect directly to long-distance carriers such as MCI and AT&T without having to go through the local phone company, such as Bell Atlantic Corp. Virtually all long-distance calls now start and finish over wires owned by these regional phone companies; they collect billions of dollars in "access charges" from AT&T and other long-distance companies for passing calls along.

Competing services could bring down the price of long-distance calls, because long-distance carriers would be able to choose between the regional company and MCI's service for their switching needs.

Eventually, however, MCI's networks could be adapted to local service: They could connect calls within a metropolitan area, setting up the first direct competition for the seven regional Bell companies and others that hold a monopoly over local phone service.

MCI successfully challenged AT&T's former monopoly in long-distance in the 1970s.

MCI has told institutional investors in recent weeks that it plans to invest in equipment that will carry local phone calls to long-distance lines in about 20 cities within the next two years, one source familiar with the company's plans said Thursday.

Some small companies now offer this kind of "bypass" service to business customers, but these companies captured less than 1 percent of the billions spent annually for access to and from local systems.