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Separate Statement of
Commissioner Rachelle B. Chong

Re: In the Matter of the Merger of MCI Communications Corporation and British Telecommunications, plc, GN Docket No. 96-245, Memorandum Opinion and Order

I support the Commission's decision today to approve the merger of MCI Communications Corporation (MCI) and British Telecommunications plc (BT) subject to important conditions and safeguards that will serve the public interest. To my mind, the key benefit of this merger is its potential to enhance competition in the domestic local telephone market. Already a strong player in the long distance market, MCI has well developed business plans to provide local telephone service to domestic consumers. This merger with BT will assist MCI in realizing such plans by bringing MCI financial resources and BT's expertise in serving local markets. The applicants have also demonstrated that many important efficiencies will be gained, and that this merger is likely to promote competition on the global telecommunications market.

This merger is notable because BT and MCI have turned their backs on the old regime of a nationally organized international communications market, and instead have chosen to make beautiful music together with Concert, an integrated global telecommunications company. Up to now, the paradigm has been the organization of the international telecommunications market around nationally-based carriers exchanging traffic with other nationally based carriers. Greatly simplified, this market structure can be thought of as "half circuits to the mid-point of the ocean." One problem with this old structure was that it resulted in a separate and often highly inefficient interconnection pricing regime for international traffic.(1) Mergers like BT/MCI represent a new era of integrated service provision and will provide important incentives for others to follow suit.

1. See In re International Settlement Rates, IB Docket No. 96-261, Report and Order, FCC-97-280, at para. 2 (August 18, 1997)