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Compiled from Times wires
© St. Petersburg Times, published November 18, 2000
WASHINGTON -- All along, WorldCom Inc. has said it didn't want to keep all of Intermedia Communications Inc., the Tampa company it bought in September.
What WorldCom wanted was Digex Inc., an Intermedia subsidiary that's a high-performing Web site manager.
On Friday, the Justice Department said WorldCom has agreed to sell most of Intermedia's assets in the next six months. Federal officials painted a picture of a government victory that would eliminate antitrust concerns.
That is hardly the case; WorldCom never intended to keep all of Intermedia's operations. But the announcement marked another step forward in WorldCom's deal.
The Justice Department had said a WorldCom-Intermedia combination would have raised prices and hurt service because of their control of Internet traffic.
So the solution, which doesn't change WorldCom's plans, is for WorldCom to keep Digex, which operates the equipment that runs Web sites for customers such as Sony Corp. and Ford Motor Co.
"The divestiture of Intermedia will preserve the competitive structure of the Internet backbone market," acting assistant attorney general A. Douglas Melamed said. WorldCom has six months to sell Intermedia's business operations and assets and expects the deal to close early in 2001. Intermedia sells telephone and Internet services to businesses.
Intermedia shares fell 25 cents to $15.25. WorldCom shares fell 25 cents to $15.75.
- Information from Bloomberg News and Times staff reports was used in this report.