MCI denies allegations

MCI on Monday denied that it misrouted calls and underpaid its rivals for interconnection fees.

The company accused AT&T, which had lodged a complaint with a bankruptcy court, of trying to "delay and derail" MCI's efforts to emerge from bankruptcy. AT&T has accused MCI of misrouting calls to hide their origin.

Telecom providers pay fees to send calls through each other's networks. AT&T and Verizon have accused MCI of disguising calls, including many from federal agencies, as local calls in order to pay lower fees. But MCI said its own internal analysis, led by the Washington, D.C. law firm of Gibson, Dunn & Crutcher LLP, indicated that calls were not misrouted.

"AT&T's motives for making these allegations are unmistakable, and its filing is a misuse of the bankruptcy process," an MCI spokesperson said. "We fully expect that AT&T will escalate its efforts to attempt to obstruct the company's reorganization efforts, and urge that any such tactics be viewed in the highly-charged competitive environment evident in this case."

Telecom analysts have said that AT&T and other telecom providers fear MCI's emergence from bankruptcy. Under MCI's proposed plan for reorganization, it would have little debt and the ability to underbid its competitors, telecom analysts say. A debt-free MCI would be a turnaround for the company, which has been hammered by doubt and scandal since it admitted last year to the largest corporate accounting fraud in history.

The General Services Administration has recommended that the company be debarred from federal contracts. However, AT&T's allegations did not factor into the agency's recommendation, according to GSA officials.

AT&T officials could not be reached for comment.