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CNN Live Today

WoldCom Peril Should Not Interfere With Telecommunications

Aired June 27, 2002 - 14:26   ET

THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.

THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
FREDRICKA WHITFIELD, CNN ANCHOR: And while we were talking Internet, an estimated 70 percent of Web traffic moves on lines that are owned and/or operated by WorldCom, but that company's considerable financial difficulties are no reason to sell your computer, and CNN financial correspondent Valerie Morris explains why.

Hi again, Valerie.

VALERIE MORRIS, CNN FINANCIAL CORRESPONDENT: Hi again, Fredricka.

The numbers are pretty daunting. Where there's a phone, it seems there's WorldCom, or MCI.

According to the FCC, about 30 percent of all placed calls go through WorldCom or MCI; 70 percent of Internet traffic, 50 percent of business communications, all are using their lines in some way.

So it stands to reason that if you're one of those customers, your phone service is in peril, but specialists say not to worry.

At worst, if WorldCom files for bankruptcy protection and starts selling assets, consumers will likely receive a letter in the mail from some new provider, elbowing its way into the void.

In fact, specialists say that's the most likely scenario. Consumers will have uninterrupted service as other companies buy up bits of MCI's network.

Even if WorldCom-MCI were left to their own devices, with no buyer, the FCC still requires telecoms to give customers 30 days notice before discontinuing service.

The 30 day rule was recently enforced in a very similar case in Colorado.

Last September, Rhythms NetConnections, a Colorado-based DSL operator, filed for Chapter 11 status and tried to end service in less than the prescribed 30 days. The FCC forced them to keep operating.

By law, telecommunications companies are required to apply to the FCC for permission to shutdown. And the 30 day rule kicks in after the application is made public. So far, WorldCom-MCI has made no such requests publicly -- Fredricka. WHITFIELD: All right, Valerie, appreciate it. Thank you very much.

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