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MCI cutting rates
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August 9, 1999: 8:01 a.m. ET
No. 2 long-distance carrier angles for AT&T's dominant 60% market share
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NEW YORK (CNNfn) - MCI WorldCom Inc. announced Monday it will cut long-distance rates to as low as 5 cents a minute during off-peak hours, a move likely to intensify price-jockeying in the intensely competitive market.
In a shot across the bow of AT&T Corp., the nation's top long-distance carrier, No. 2 MCI said weekday calls between 7 p.m. and 7 a.m. and all weekend calls will fall to 5 cents per minute. The service, to be called "MCI Five Cents Everyday," carries a fee of $1.95 a month and covers state-to-state calls for 108 hours per week.
Jackson, Miss.-based MCI WorldCom (WCOM) also will offer peak-hour service for 10 cents per minute, for a monthly service charge of $4.95. Callers sticking to the off-peak deal "Five Cents Everyday" plan will have to pay 25 cents per minute for peak-hour long-distance calls.
The move, the first by MCI in the residential, long-distance market in two years, signals the company is serious about increasing its share of that business segment.
MCI said the move was made possible by a Federal Communications Commission decision to lower access charges that long-distance companies have to pay local phone service providers.
AT&T (T) currently dominates the long-distance market with a 60 percent share. MCI's aggressive move could pave the way for further price cuts in the $80 billion market. AT&T currently offers its customers a 10-cents-per-minute tariff, 24 hours per day, for $4.95 per month.
Among MCI's other rivals, No. 3 Sprint Corp. (FON) offers customers 5 cents a minute calls from 7 p.m. to 12 a.m. for a monthly fee of $5.95; Qwest Communications Inc. (QWST) offers customers round-the-clock calling at 5 cents a minute for a monthly charge of $14.95.
MCI will boost its advertising campaign that stars former basketball star Michael Jordan and Looney Tunes animated characters to promote the lower long-distance rates. The Looney Tunes trademark is owned by CNN parent Time Warner Inc.
Shares of MCI WorldCom fell 1-15/16 to close at 81-1/4 on the Nasdaq stock market Friday. 
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MCI WorldComm
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