MCI WorldCom Corp. said Wednesday it agreed to pay Britain’s Cable & Wireless Communications PLC $200 million to settle a dispute stemming from Cable & Wireless’ 1998 purchase of the Internet business of MCI Communications Corp.
When Clinton, Miss.-based MCI Communications merged with Britain’s WorldCom in 1998, it sold IMCI, MCI’s Internet backbone operations, to Cable & Wireless for $1.75 billion to resolve antitrust concerns.
Cable & Wireless alleged MCI breached the sale contract by providing only a few of IMCI’s employees and none of its customer accounts.
Cable & Wireless filed a lawsuit against MCI WorldCom last March, seeking punitive damages of up to $500 million and compensation of $12 million.
In December, an independent arbitrator awarded Cable & Wireless $23 million in damages, an amount that is in addition to the $200 million settlement payment.
Cable & Wireless, a telecommunications provider, had $2.18 billion in sales in the six months ended Sept. 30.
MCI WorldCom, the second-largest long-distance firm in the U.S. is seeking to buy Sprint Corp., a deal also facing antitrust issues.
