Internet giant MCI WorldCom Inc. announced March 2 that it has agreed to pay $200 million to Cable & Wireless PLC to settle a lawsuit stemming from MCI’s sale of its Internet network to the British firm (Cable & Wireless USA Inc. v. MCI Worldcom Inc., D. Del., No. 99-204, filed 3/31/99, settled 3/2/00).
The lawsuit was seen as an obstacle to MCI WorldCom’s pending merger with Sprint Corp., which has faced criticism from federal regulators who must approve the deal. The suit resulted from WorldCom’s 1997 acquisition of MCI. In order to gain Department of Justice approval, MCI agreed to sell its Internet “backbone,” the network of cables that carry computer data to allay DOJ concerns that WorldCom’s own backbone business, UUNet Technologies Inc., combined with MCI’s, would have concentrated too much Internet traffic under one company.
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