MCI Communications Corp. yesterday announced the first of what the company said will be a series of historic agreements with local telephone companies that will provide customers with the same access to the MCI long-distance network that callers have to the Bell System's long-distance facilities.
The contract with Northern Iowa Telephone Co., a small company in a predominately agricultural section of western Iowa, is as much a symbolic move as it is a decision that will alter MCI's financial picture.
MCI officials have long argued that it is technologically possible to connect with the District-based company's long-distance microwave network in ways simpler than the complex hookup customers of American Telephone & Telegraph Co. and other local companies must use to subscribe to MCI's system.
"History will show this agreement as a watershed in our relationship with the telephone industry," said MCI Chairman William McGowan, who said the company was negotiating similar agreements with five of the approximately 1,500 independent telephone companies across the country. "The whole industry knows this is possible."
But AT&T, which serves more than 80 percent of the nation's homes, has publicly ruled out this type of system for linking their customers with the MCI network. In fact, MCI and the other long-distance competitors of AT&T appear to be at an impasse in current negotiations with the rest of the telephone industry over the terms of a new agreement on the costs and mechanics of these complex arrangements.
As things stand now, to place a long-distance call each of MCI's 275,000 residential customers must dial a seven-digit number hooking up with a computer, then dial a five-digit personal code and then dial the area code and the phone number, a total of 22 numbers.
But the 2,100 customers of Northwest Iowa will simply dial "6" or "M" for their long-distance calls, in addition to being able also to use the AT&T network in the same manner they always have. Northwest Iowa also will handle the billing for MCI when the service begins on Aug. 1.
The MCI microwave network now reaches about 60 percent of the telephones in the nation and serves about 4,500 cities. The company has planned a $200 million expansion program for the current fiscal year.