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Telecommunications Reports presents....

TR DAILY
January 15, 2001
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Table of Contents

Click here for the full issue:
http://www.tr.com/online/trd/2001/td011501/index.htm

WorldCom TO PAY $88M TO END
LAWSUIT ALLEGING OVERCHARGES
http://www.tr.com/online/trd/2001/td011501/Td011501.htm

QWEST CITES IMPROVED SERVICE,
ANNOUNCES LINE-SHARING PACTS
http://www.tr.com/online/trd/2001/td011501/Td011501-01.htm

PORTUGAL TELECOM AIMS TO EXPAND BRAZILIAN HOLDINGS
http://www.tr.com/online/trd/2001/td011501/Td011501-02.htm

`CREATIVE FINANCING' RECOMMENDED TO MEET ASIAN DEMAND FOR
NETWORKS
http://www.tr.com/online/trd/2001/td011501/Td011501-03.htm

GOVERNMENT TELECOM OFFERINGS WON'T SPEED ADVANCED SERVICE
ROLLOUT, PFF PAPER SAYS
http://www.tr.com/online/trd/2001/td011501/Td011501-04.htm

NEWS IN BRIEF
http://www.tr.com/online/trd/2001/td011501/Td011501-05.htm


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WorldCom TO PAY $88M TO END LAWSUIT ALLEGING OVERCHARGES

WorldCom Corp., has agreed to pay $88 million to customers who
claim they were overcharged for direct-dialed calls.  The
proposed settlement ends a class-action lawsuit brought by
subscribers who complained that MCI WorldCom, Inc. (now WorldCom)
misled them about the conditions under which it would charge them
higher nonsubscriber rates for domestic and international calls.

While the company admits no wrongdoing, it has agreed to
compensate customers for the higher charges on calls placed
between Feb. 5, 1996, and Oct. 15, 2000.  Under the terms of the
settlement, WorldCom also agreed not to raise "casual calling"
rates for nonsubscribers this year.  Daniel Girard, an attorney
who represents the subscribers, said that a letter regarding the
settlement would be sent to 5 million people who may be eligible
for reimbursement.

The U.S. District Court for the southern district of Illinois
will decide at a March 29 hearing whether to approve the terms of
the settlement in the case ("In re MCI Non-Subscriber Telephone
Rates Litigation," docket no. 1275).

In the lawsuit, the subscribers claimed that MCI didn't provide
sufficiently clear tariff information describing when it would
charge them the higher nonsubscriber rates and surcharges for
placing direct-dialed calls.  The tariff stated that customers
who remain "presubscribed to MCI after [their] account(s) are
removed from MCI's billing system" would be charged nonsubscriber
rates.

In 1998, the FCC found that the tariff was "too confusing" (TR,
Nov. 19, 1998).  The FCC's decision "opened the door" for the
lawsuit and resulting settlement, Mr. Girard said.


***************************************************************
QWEST CITES IMPROVED SERVICE,
ANNOUNCES LINE-SHARING PACTS

Qwest Communications, Inc., says it improved its service to end-
user customers and other carriers in 2000 in key areas--including
those that have come under fire from consumers and state
regulators.

Qwest filled almost 98% of it service orders on time, Afshin
Mohebbi, Qwest's president-worldwide operations, told reporters
during a conference call today.  Ninety-five percent of local
service repairs were completed on time, Qwest's best performance
in this category since 1996, he said.  He also cited reductions
in the percentage of customers whose service was out for more
than 24 hours and a decrease in "held or delayed" orders.

Qwest today also unveiled permanent line-sharing agreements with
MULTIBAND Communications, Inc., New Edge Networks, NorthPoint
Communications, Inc., and Contact Communications.  Line-sharing
agreements enable competitors to use the high-frequency portion
of the loop for data transmission while Qwest continues to
provide voice service over the low-frequency portion.  Permanent
line-sharing agreements now are available to all wholesale
customers, Mr. Mohebbi said.

In other long-term plans, Qwest will seek the FCC's approval to
offer interLATA (local access and transport area) services in at
least one state by year-end; it plans to initiate state-level
proceedings in several others, Mr. Mohebbi said.  He said Qwest
hoped to obtain approval in all of the states in its service area
by the end of next year.

Under section 271 of the Telecommunications Act of 1996, a Bell
company must obtain FCC permission before providing in-region
interLATA services.  The FCC must consult with the relevant state
commissions as well as the Justice Department to ensure that the
Bell company has sufficiently opened its markets to competition.


***************************************************************
PORTUGAL TELECOM AIMS TO EXPAND BRAZILIAN HOLDINGS

Portugal Telecom SGPS SA plans to expand its Brazilian presence
by acquiring wireless operator Global Telecom SA, which operates
networks in the Parana and Santa Catarina states.  Those states
are neighbors to Sao Paulo, where Portugal Telecom already offers
wireless service through its Brazilian subsidiary, Telesp Celular
Participacoes SA (TCP).

Under an agreement announced today, TCP will pay $556 million in
cash and assume $654 million in debt to acquire Global Telecom
from its current owners--Japan's KDDI Corp., Argentina's ITX
Corp., and Brazil's Inepar SA Industria e Construcoes.

Global Telecom's territory has 15 million "pops" (potential
customers), of which the carrier has captured 463,000
subscribers.  TCP has about 4 million subscribers.  The
combination of the two requires the approval of Brazil's telecom
regulator, Anatel.  TCP intends to pay for the transaction with
its cash reserves and debt financing.

The announcement of the agreement prompted Moody's Investors
Service to place the debt ratings of Portugal Telecom on review
for possible downgrade.  By acquiring Global Telecom, Portugal
Telecom would take "advantage of a unique investment opportunity
in a high-growth wireless business," Moody's said in a statement.
But "the magnitude of the investment may constrain the financial
ratios" of Portugal Telecom, Moody's said, "as well as expose it
to a higher risk operating environment."


***************************************************************
`CREATIVE FINANCING' RECOMMENDED TO MEET ASIAN DEMAND FOR
NETWORKS

Future telecom infrastructure projects in Asia will require
"creative financing solutions" if development is to keep pace
with demand, a Washington, D.C.-based international telecom
lawyer said today.  The greatest obstacle to meeting Asia's
demand for Internet and other telecom networks is "meeting the
communications sector's demand for capital," according to Glenn
S. Gerstell, a Milbank, Tweed, Hadley & McCloy LLP partner.

Speaking at the Pacific Telecommunications Council's conference
in Hawaii, Mr. Gerstell presented a "white paper" describing the
benefits and drawbacks of various financing methods--and how a
combination of approaches can secure needed financing in spite of
the reluctance of financial institutional to take risks in less
developed nations.

"Techniques for Financing Telecoms and Internet Infrastructure
Buildout in Asia," which was co-authored by Milbank, Tweed Senior
Associate Alisa Fiddes, focuses on projects and companies in
"start-up mode," rather than on more "mature" businesses.

Vendor financing historically has provided limited options to
purchasers.  Continued telecom industry privatization, combined
with a "proliferation of start-up companies," has further limited
this option, according to the paper.  However, national export
credit agencies (ECAs) often are eager to finance and participate
in projects involving sales of domestic high-tech goods.

Combining vendor financing with ECA or multilateral credit agency
funding could help overcome weaknesses in either financing
method, the paper says.  Likewise, reaching out to a combination
of commercial bank markets and capital markets or entering into
strategic partnerships "can reduce project risks by bringing
together partners with different resources and expertise," it
adds.


***************************************************************
GOVERNMENT TELECOM OFFERINGS WON'T SPEED
ADVANCED SERVICE ROLLOUT, PFF PAPER SAYS

Through government-owned telecom networks, some states and cities
are trying to ensure their constituents don't have to wait for
advanced telecom services.  But such efforts are
counterproductive, according to a paper released by the Progress
& Freedom Foundation, a Washington, D.C., think tank.

"Governments that have entered the telecommunications business
have been saddled with financial losses and obsolete, legacy
technologies.  Furthermore, government entry in the marketplace
distorts incentives and slows the development of private-sector
competition," writes PFF president, Jeffrey A. Eisenach, author
of "Does Government Belong in the Telecom Business."

He views the pace of state and local government entry into the
telecom and Internet service businesses as "rapid and
increasing," citing efforts by municipally owned utilities on
Long Island, New York; Los Angeles; and Chicago.  In total, the
paper lists 233 municipal utilities that were providing one or
more of the following services in 1998:  cable TV, Internet
access, high-speed data, broadband data resale, local phone, long
distance, leased fiber, and municipal data network services.


***************************************************************
NEWS IN BRIEF

Wisconsin Gov. Tommy G. Thompson (R.) has appointed Robert Garvin
to a seat on the Wisconsin Public Service Commission, effective
March 1, subject to state Senate confirmation.  Mr. Garvin most
recently has been PSC Chairperson Ave M. Bie's executive
assistant and previously held staff attorney and legislative
liaison posts at the commission.  He would succeed Commissioner
John H. Farrow, who recently asked the governor not to reappoint
him when his term expires in March.  Mr. Farrow plans to return
to his faculty position at the Milwaukee School of
Engineering....

Duncan Lewis has been named president and chief operating officer
at Global TeleSystems, Inc. (GTS), a London-based international
carrier.  He was managing director and chief corporate
development officer at Equant NV.  He succeeds Robert J. Amman,
who will remain GTS' chairman and chief executive officer.  But
after GTS completes its proposed restructuring (TR, Nov. 20,
2000), Mr. Amman will become the company's nonexecutive chairman
and Mr. Lewis will be the CEO....

Kymata Ltd. said today that Brendan Hyland will step down as
chief executive officer of the Scottish optical telecom system
manufacturer.  Chief Operating Officer Michael Hickey has been
named interim CEO....

Jeffrey D. Lin has been named chief financial officer at Zaffire,
Inc., a California optical network developer.  He was director
and manager-investments at Vulcan Ventures, the investment firm
of Microsoft Corp. co-founder Paul G. Allen....

Loren Stokes was named vice president-research and development at
Cierra Photonics, Inc.,  a California fiber optics integration
technology manufacturer.  He was director-R&D at Hewlett Packard
Co. spin-off Agilent Technologies, Inc....

A New York City telecom/real estate law firm has joined forces
with the New York law office of Mintz Levin Cohn Ferris Glovsky
and Popeo P.C.  Jeffrey A. Moerdler, who has moved his private
law practice to Mintz Levin, has been elected partner and section
head of the firm's telecom and real estate sections.  He brings
with him eight lawyers: Stephen E. Friedberg and Pamela Caruso
Yerman, who will be partners; and associates Helen Allison,
Lorette H. Dundas, Carolyn C. Jones, Rhona J. Kisch, and C.
Anthony Mulrain....

Dorothy McCarthy is the new head of telecom real estate
initiatives at Global Broadband, Inc., a New York City integrated
communications provider.  She was managing director-national real
estate at OnSite Access, Inc....

Time Warner Telecom, Inc., intends to raise as much as $700
million through the sale of stock and debt securities to help pay
for its acquisition of GST Telecommunications, Inc.  Time Warner
Telecom, of Littleton, Colo., revealed its plan in a filing with
the Securities and Exchange Commission.  The funds would be used
to repay an unsecured bridge loan that was used to pay for GST,
Time Warner Telecom said.  Further details of the fundraising
effort will be disclosed in future filings, the company said.
Time Warner Telecom last week completed the $690 million
acquisition of GST, a competitive local exchange carrier that was
in bankruptcy (TR, Sept. 18, 2000)....

Nippon Telegraph & Telephone Corp. subsidiary NTT Com has agreed
next month to form a Thailand data center joint-venture with Shin
Corporations Public Co. Ltd., a Thai telecom conglomerate.  Each
will hold a 47.5% stake, while Saha Pathana Inter-Holding Public
Co. Ltd. will hold a 5% stake.  The venture will be capitalized
at 1.72 billion yen (U.S.$14.5 million)....

The South Korean Ministry of Information and Communications has
granted an international private leased circuit license (IPLC) to
Korea Thrunet Co. Ltd.,  a Seoul-based broadband service
provider.  Korea Thrunet said it initially would use the license
for internal company use, and next year would offer IPLC services
via satellite and submarine cable to domestic and global
customers....

Global One has announced an interconnection agreement with
Latinet, a broadband and Internet service provider.  The
agreement will enable Global One to provide frame relay service
in Ecuador and Panama.  It will market the service to the two
nations' industrial sectors.  Subscribers would be given access
to Global One network access centers in 75 countries.


********************************************************
TR DAILY Copyright 2001 Telecommunications Reports International,
Inc., (ISSN 1082-9350) is transmitted weekdays, except for
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