As MCI Goes, So Goes the Arena That Bore Its Name

MCI Center will lose its long-standing name and become Verizon Center following the merger of the two companies, the arena's owner said yesterday.

Washington Sports and Entertainment LP, which operates the 20,000-seat arena, announced the change hours after Verizon Communications Inc. completed its $8.5 billion purchase of MCI Inc.

The switch, which includes replacing logos and signs at the home of the Washington Wizards, Capitals and Mystics, will take place by the end of March.

For many area residents, the name change will be the most immediate and tangible result of a merger that reflects the transformation of the telecom industry over the last decade.

Long-distance companies like MCI and the former AT&T Corp. were once expected to become major rivals of local phone companies like Verizon, the dominant provider in the Washington region.

Instead, partly because of regulatory and court decisions, MCI and AT&T had little success winning local telephone customers, saw their long-distance revenues wither away and eventually were bought out by their rivals.

New York-based Verizon, the second-largest telecommunications company in the country, acquired Ashburn-based MCI mainly to obtain its long list of business and government customers and its extensive communications networks around the world. The nation's largest telecom company -- AT&T Inc. -- was formed in November when SBC Communications Inc. followed the same reasoning and bought AT&T Corp. for $16 billion.

A key reason regulators have approved these recent mergers -- which have reassembled large parts of the AT&T system the government broke up in 1984 -- is growing competition from cable, wireless and Internet phone providers.

The completion of the two latest deals has raised the question of whether Atlanta-based BellSouth Corp., the nation's third-largest local phone company, may be the next to hook up.

AT&T Chairman Edward E. Whitacre Jr. has made no secret of his interest in owning BellSouth, which would allow his company to take full control of Cingular Wireless, the nation's largest mobile phone company. Cingular is now 60 percent owned by AT&T and 40 percent by BellSouth but operates as a 50-50 joint venture, giving BellSouth a veto over major decisions.

"It sure would be nice," Whitacre told BusinessWeek in an interview published last November about the possibility of buying BellSouth. "But it doesn't have much chance of happening because of market power, size, etc. I think it would be real hard to do. I don't think the regulators would let that happen."

Asked if he had made an overture to BellSouth, he said: "I wouldn't say we haven't done that in the past, but I'm not going to do it now. I've certainly thought about it a few times."

BellSouth and AT&T spokesmen declined comment on the possibility of any combination of the companies.

Former Justice Department officials, private antitrust attorneys and telecom industry analysts said that an AT&T-BellSouth combination would probably win approval from the Justice Department and the Federal Communications Commission, albeit with conditions.

"Rather than a fundamental problem, the question is likely to be whether specific, narrow markets need negotiated solutions," said R. Hewett Pate, who stepped down as the Justice Department's assistant attorney general for antitrust last year and is now a partner at the Hunton & Williams law firm.

"The Antitrust Division has plainly moved beyond the ancient history of the Bell breakup and the myopic views of the 1996 telecom act to take account of the increasing competition among traditional telecom firms, cable providers, satellite companies and potentially others," he added.