MCI Communications
Former American telecommunications company that helped introduce competition to the U.S. long-distance telephone market.
Last updated August 21, 2026
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Overview
MCI Communications Corporation was an American telecommunications company whose history was closely tied to the deregulation and restructuring of the United States telephone industry. Originally established as Microwave Communications, Inc. in 1963, it initially proposed building a microwave radio relay network between Chicago and St. Louis. The company intended to serve businesses, shippers, truckers, and other customers that could not economically construct private communications systems or obtain affordable service from AT&T's regulated network. MCI's development was enabled by a series of legal and regulatory changes. The 1968 Carterfone decision required AT&T to permit compatible privately manufactured equipment to connect with the public telephone network. In 1969, the Federal Communications Commission authorized MCI to build a microwave route between Chicago and St. Louis despite opposition from AT&T. MCI subsequently organized regional operating companies and pursued additional licenses, gradually assembling a national network. William G. McGowan became a major investor during the company's early expansion, providing capital, taking a board seat, and later becoming its leading executive figure. The company began selling data-transmission services in 1972 and became publicly traded that year. It entered switched voice telecommunications in the mid-1970s, using a combination of its own microwave infrastructure and leased facilities. MCI's antitrust litigation against AT&T, initiated after Illinois Bell refused to interconnect an MCI circuit, became one of the most consequential corporate legal actions in American telecommunications. Although the damages awarded to MCI were later reduced substantially on appeal, the case reinforced broader federal efforts that ultimately resulted in the breakup of the Bell System and the opening of long-distance service to competition. MCI expanded beyond conventional voice calling. It acquired Western Union International's cable properties and rights of way in 1982, launched MCI Mail in 1983, deployed an early single-mode fiber-optic route between New York and Washington in 1984, and acquired RCA Global in 1987. The company also became an important participant in the development of commercial networking. Through its work with IBM, Merit Network, the National Science Foundation, and Vint Cerf, MCI supported NSFNET-related infrastructure, interconnection between commercial electronic-mail systems and the Internet, and the later MCI.net commercial backbone. By 1990, after acquiring Telecom*USA, MCI had become the second-largest U.S. telecommunications company, with a fiber network exceeding 46,000 miles and services spanning voice, data, telex, fax, electronic mail, and international communications. Its consumer business included discount calling programs, collect-call services such as 1-800-COLLECT, and high-profile advertising campaigns that challenged AT&T's pricing. It also pursued satellite communications and a proposed satellite-television venture with News Corporation, although the latter never began broadcasting. British Telecommunications acquired a minority stake in 1994 and later sought to buy the whole company. After competing offers from BT and GTE, MCI accepted WorldCom's higher stock proposal in 1997. The acquisition closed in 1998, creating MCI WorldCom. The MCI name was later dropped, but it returned when the restructured company emerged from WorldCom's 2002 bankruptcy as MCI Inc. Verizon Communications acquired MCI in 2005, with the transaction completed in 2006. The independent MCI corporate brand consequently disappeared into Verizon's enterprise telecommunications operations.
History
MCI was founded on October 3, 1963, as Microwave Communications, Inc., with John D. Goeken as its first president. Its original proposal was to construct microwave relay stations between Chicago and St. Louis and provide communications services to commercial users, including trucking and shipping businesses. The company also envisioned voice, data, and computer-information services for customers unable to afford AT&T's private-line offerings. The regulatory environment changed materially in 1968, when the FCC's Carterfone ruling invalidated AT&T restrictions on connecting privately manufactured equipment to the telephone network. MCI benefited from this opening and from subsequent policy debates over specialized common carriers. On August 14, 1969, the FCC approved MCI's Chicago–St. Louis construction application by a 4–3 vote. AT&T challenged the decision, but the approval survived administrative and judicial review. MCI created or acquired regional carrier interests and pursued additional microwave routes, laying the foundation for a competing national network. William G. McGowan invested heavily in the company in 1968, helping pay outstanding obligations and finance expansion. In 1971, the corporate structure was reorganized as MCI Communications, and the company began consolidating its regional carriers. MCI started selling data-transmission services in January 1972 and completed an initial public offering on June 22 of that year under the NASDAQ symbol MCIC. It also explored satellite communications with Lockheed and Comsat. MCI eventually sold its interest in the venture to IBM, which developed the business as Satellite Business Systems before selling the operation back to MCI in 1986. MCI's confrontation with AT&T reached the courts after Illinois Bell declined to interconnect an MCI long-haul circuit. MCI filed an antitrust action in January 1974. A 1980 jury verdict awarded $1.8 billion, though an appellate decision later reduced the award to $113 million. Together with the federal antitrust case against AT&T, MCI's litigation contributed to the legal and competitive conditions that produced the 1984 breakup of the Bell System. MCI began offering switched voice service in 1975, combining its microwave facilities with leased AT&T circuits. During the 1980s, the company broadened its assets and technical capabilities. It purchased Western Union International's cable properties and rights of way from Xerox in 1982 and renamed the business MCI International. In 1983, a division led by Robert Harcharik and supported by Vint Cerf launched MCI Mail, an early electronic-mail service. MCI deployed the Mid-Atlantic Fiber Optic System in 1984, becoming an early user of single-mode fiber, which later became the dominant long-distance carrier standard. RCA Global was acquired from General Electric in 1987. MCI was also an important commercial-networking participant. In 1987 it worked with IBM and Merit Network on NSFNET, a high-speed network using TCP/IP. In 1989, MCI Mail became the first commercial electronic-mail service to interconnect with NSFNET. After NSFNET's commercial transition, MCI built the vBNS for the National Science Foundation and operated MCI.net, a commercial Internet backbone that became an important part of global connectivity. In 1990, MCI acquired Telecom*USA and became the second-largest U.S. telecommunications company. Its network covered more than 46,000 miles and supported voice, data, telex, fax, electronic mail, and international services. Consumer marketing included the Friends & Family calling plan, introduced in 1991, and the 1-800-COLLECT collect-call service, introduced in 1993. The company also entered satellite television through a 1995 partnership with News Corporation, but the American Sky Broadcasting venture never launched. BT acquired a 20 percent interest in MCI in October 1994 and offered to purchase the remainder in 1996. GTE made a competing bid in 1997, while WorldCom offered a higher stock-based proposal. MCI accepted WorldCom's offer on November 10, 1997, and the transaction closed on September 15, 1998. The combined company was called MCI WorldCom, but the MCI portion of the name was removed two years later. After WorldCom's accounting scandal and 2002 bankruptcy, the reorganized company adopted the MCI Inc. name in 2003. Verizon acquired MCI in a transaction completed in 2006, ending MCI's independent corporate history.
- 2006
Verizon completes MCI acquisition
[1]MCI is absorbed into Verizon and ceases to operate as an independent company.
- 2003
Reorganized company adopts MCI Inc. name
[1]The MCI identity returns after WorldCom's bankruptcy reorganization.
- 1998
WorldCom merger closes
[1]MCI becomes part of MCI WorldCom after accepting WorldCom's competing acquisition offer.
- 1993
1-800-COLLECT launches
[1]MCI introduces a heavily advertised collect-calling service.
- 1990
Telecom*USA acquisition makes MCI the second-largest U.S. telecom company
[1]The acquisition materially expands MCI's domestic network and service portfolio.
- 1987
RCA Global is acquired
[1]MCI expands its international communications business through the purchase of RCA Global.
- 1984
MCI deploys single-mode fiber
[1]The Mid-Atlantic Fiber Optic System becomes an early long-distance single-mode fiber deployment.
- 1983
MCI Mail launches
[1]MCI introduces one of the early commercial electronic-mail services.
- 1982
Western Union International is acquired
[1]MCI purchases Western Union International's cable properties and rights of way from Xerox.
- 1975
Switched voice service begins
[1]MCI starts offering switched voice telecommunications in competition with AT&T.
Products and positioning
A telecommunications challenger that used regulatory liberalization, alternative network infrastructure, aggressive pricing, and communications technology to compete with AT&T and expand access to long-distance and business networking services.
Long-distance telecommunications · 1975
MCI Long Distance
MCI's core consumer and business offering provided interstate and international long-distance calling in competition with AT&T. The service relied on MCI's microwave, fiber, and leased network facilities. It was marketed around lower prices and the idea that customers were being overcharged by the incumbent carrier, making long-distance competition a central part of the company's identity.
Electronic mail · 1983
MCI Mail
Launched in 1983, MCI Mail was an early commercial electronic-mail service. It used packet-switched networking and provided a bridge between traditional telecommunications and emerging digital communications. In 1989 it became the first commercial email service to interconnect with NSFNET, an important step in the broader interconnection of commercial online services with the Internet.
Internet backbone and access · 1994
MCI.net
MCI.net was the company's commercial Internet service and backbone network. It developed out of MCI's networking work for NSF-related high-speed infrastructure and became an important component of global Internet connectivity. The business was later transferred as part of the WorldCom combination and was ultimately sold to Cable & Wireless.
Calling plan · 1991
Friends & Family
Introduced in 1991, Friends & Family offered reduced rates for calls to a customer-selected group of up to 20 MCI customers. The plan used a social-network concept to encourage customers to move both their own calling and the calling of close contacts to MCI.
Collect calling · 1993
1-800-COLLECT
MCI launched 1-800-COLLECT in 1993 as a consumer collect-call service. Its television advertising used recognizable entertainers and the fictional spokesperson Eva Save-a-lot to make the service familiar to mass-market customers. The service was later sold to viiz.
International communications · 1982
MCI International
MCI International was the renamed business created after MCI acquired Western Union International's cable properties and rights of way. It expanded MCI's international transmission capabilities and gave the company additional terrestrial infrastructure outside its original domestic long-distance network.
Controversies
2002
WorldCom accounting scandal and bankruptcy
MCI's corporate successor, WorldCom, became involved in a major accounting scandal involving improperly recorded expenses. WorldCom filed for bankruptcy in 2002, and the reorganized company later adopted the MCI Inc. name. The episode damaged the WorldCom identity and led to a return to the better-established MCI name.
Marketing campaigns
- 19931-800-COLLECT advertising
United States
MCI used broad television advertising, including appearances by Phil Hartman, Chris Rock, Arsenio Hall, and Alyssa Milano as Eva Save-a-lot, to popularize its collect-calling number.
Outcome. Made the service a widely recognized consumer telecommunications brand.
- 1991Friends & Family launch campaign
United States
MCI promoted its calling-circle plan as a way for households and close contacts to reduce the cost of repeated calls among selected numbers.
Outcome. Expanded MCI's consumer long-distance proposition beyond simple per-minute price competition.
- 1982You're not talking too much, you're just paying too much
United States
MCI adapted the emotional premise of an earlier AT&T long-distance advertisement into a price-focused comparison. Instead of presenting a long-distance call as expensive but emotionally worthwhile, the MCI version used an unexpectedly high telephone bill to emphasize the incumbent's pricing. The campaign positioned MCI as the lower-cost alternative and became one of the best-known advertisements in the company's history.
Outcome. Strengthened MCI's challenger positioning and public association with lower long-distance prices.
Brand decisions
2005
Agree to Verizon acquisitionM&ABackground
MCI was operating as the reorganized successor to WorldCom and remained a major enterprise telecommunications provider.
Action taken
MCI agreed to be acquired by Verizon Communications.
Aftermath
The transaction was completed in 2006, ending MCI's independent corporate existence.
1997
Accept WorldCom acquisition proposalM&ABackground
MCI was the subject of competing acquisition proposals from British Telecommunications, GTE, and WorldCom.
Action taken
MCI accepted WorldCom's stock-based proposal, which exceeded the competing offers.
Aftermath
The merger closed in 1998 and created MCI WorldCom; the MCI name was later removed before returning after bankruptcy reorganization.
1987
Participate in NSFNET developmentStrategyBackground
The National Science Foundation sought a high-speed TCP/IP network to connect research institutions.
Action taken
MCI partnered with IBM and Merit Network and later supported high-speed backbone projects for the National Science Foundation.
Aftermath
The work positioned MCI as an infrastructure participant in the transition from research networking to the commercial Internet.
1983
Launch MCI MailProduct launchBackground
Digital messaging and packet-switched data services were emerging as extensions of business telecommunications.
Action taken
MCI launched a commercial electronic-mail service based on an X.25 data network.
Aftermath
MCI became an early participant in commercial email and later connected the service with NSFNET.
1975
Enter switched voice telecommunicationsStrategyBackground
MCI had built alternative microwave capacity and gained regulatory support for specialized common-carrier competition.
Action taken
The company began offering switched voice service using its own circuits together with leased AT&T facilities.
Aftermath
MCI became a direct competitor in the U.S. long-distance voice market and helped normalize non-Bell carrier access.
- AT&T — AT&T opposed MCI's network access and challenged the company's licenses and interconnection arrangements.
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