Hoping to clear the way for its pending merger to WorldCom Inc., MCI Communications Inc. said it will sell its Internet business to Britain's Cable & Wireless PLC for $625 million in cash, the companies announced early Thursday. The sale comes amid intense scrutiny of the proposed $37 billion merger between MCI and WorldCom. European and U.S. officials fear that the merger would concentrate too much control of the Internet in the combined company's hands.

MCI and WorldCom hope to complete their deal sometime this summer. WorldCom's UUNet Technologies division is the top provider high-speed Internet hook-ups through a global computer that makes up the "backbone" of Internet communication. MCI, an early entrant into the Internet business, is number two. "By divesting MCI's Internet backbone, we have eliminated any overlap with WorldCom's Internet business," said Bert Roberts, MCI's chairman, in a statement. "We have formed an agreement that addresses antitrust concerns with the MCI-WorldCom merger, ensures the continued delivery of quality Internet services for all our customers and creates an exciting new opportunity for some of the industry's most skilled Internet personnel," Roberts added.

According to press reports, GTE Corp., a key critic of the MCI-WorldCom merger and itself a one-time suitor for MCI, has told U.S. officials MCI's Internet business is worth about $4 billion. The sale vaults UK-based Cable & Wireless, long seen as a potential expansionist stateside, into a top position in the hot Internet business through its U.S. subsidiary.

"The Internet is a vital part of our growth engine," Richard H. Brown, Cable & Wireless chief executive, said, adding that the Internet business is growing by 50 percent a year.

Through the deal MCI will sell its Internet backbone service division, comprised of its 22 U.S. nodes, 15,000 interconnection ports and 40 peering agreements. Cable & Wireless will take control of MCI's contracts with Internet Service Providers, but MCI's residential and non-ISP customers are not affected.

http://www.cwc.com/

(c) CNN