AT&T says MCI diverted government calls to Canada to avoid local access fees

<br>NEW YORK (AP) _ AT&T Corp. has accused long-distance giant MCI of improperly diverting calls to Canada to avoid paying access fees to local telephone companies. <br><br>AT&T said some of the calls

Tuesday, July 29th 2003, 12:00 am

By: News On 6

NEW YORK (AP) _ AT&T Corp. has accused long-distance giant MCI of improperly diverting calls to Canada to avoid paying access fees to local telephone companies.

AT&T said some of the calls originated in the State Department and other government agencies, suggesting in a court filing Monday that MCI placed national interests at risk because the calls could be unprotected from eavesdroppers.

AT&T said it had evidence that MCI had been diverting calls dating back to July 2001 and as recently as Monday morning.

The claims were made by AT&T in a filing in U.S. Bankruptcy Court, which is considering efforts by WorldCom Inc. to emerge from Chapter 11 bankruptcy protection. WorldCom, brought down by an $11 billion accounting scandal, is adopting the name of its MCI long-distance division in a bid to clean up its image.

MCI did not return a telephone call Monday seeking comment. But it said over the weekend that its competitors were trying to throw up roadblocks to its emergence from bankruptcy.

Federal prosecutors are also investigating accusations by rival carriers and former MCI executives that the company defrauded other telephone companies of hundreds of millions of dollars.

The investigation centers on whether MCI masked long-distance calls as local calls and diverted others to Canada to avoid paying special-access fees to local carriers across the country.

AT&T said it had conducted tests on its lines in the past two weeks to confirm the activity.

AT&T accused MCI of carrying out a coding process that shifted calls to a local carrier in the Midwest, then to a local carrier in the Canadian province of Manitoba, then to Bell Canada and back to the United States on AT&T lines. Bell Canada has a long-standing agreement to send its U.S.-bound calls to AT&T lines.

The company said MCI's routing deceived AT&T into believing the calls had originated in Canada _ forcing AT&T to pay the high local access fees.

AT&T said MCI diverted calls placed by the State Department, one member of Congress, the U.S. Postal Service, the Library of Congress and the U.S. Agency for International Development. The company did not name the member of Congress.

MCI officials have ``demonstrated their willingness to play fast-and-loose with our national interests to line their pockets with cost savings from local telephone tariffs they dodged,'' AT&T said in its filing.

AT&T did not directly allege that MCI had compromised national security, saying only that it was alarmed by the practice.