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Fairholme Urges MCI Board to Meet With Qwest
[March 01, 2005]

Fairholme Urges MCI Board to Meet With Qwest


SHORT HILLS, N.J., March 1 /PRNewswire/ -- The Fairholme Fund and Fairholme Capital Management, on behalf of advisory clients, own approximately 11 million shares of MCI common shares as of our most recently publicly reported investment schedules.


We are concerned that the MCI Board of Directors has not yet responded to Qwest's proposal.
Negotiations with Qwest seem highly likely to lead to a superior offer to the terms set forth in the Verizon-MCI merger agreement. We urge the MCI Board to meet with representatives of Qwest promptly -- owners have much to gain and nothing to lose. A level playing field is the best chance to maximize value for all shareholders.
Furthermore, we urge all MCI owners to communicate their views to the company.
The following letter is being sent to the MCI Board of Directors today:

Board of Directors
MCI Inc.
22001 Loudon County Parkway
Ashburn, VA 20147


To the Directors:


Fairholme Capital Management, L.L.C. is a large owner of MCI, with approximately eleven million shares held on behalf of clients and ourselves (as set forth in the firm's latest Schedule 13F filing).
We are surprised and concerned that the Board of Directors of MCI has not yet publicly indicated its willingness to engage in meaningful dialogue with Qwest, whose public statements clearly indicate that discussions with the Board of MCI are likely to lead to a "superior proposal" as that term is defined in the Verizon merger agreement.
In various forums, we have discussed our reservations about the Verizon merger, including concerns regarding total consideration and the cash portion of the offer, given contingencies and the previous commitment by the Board of MCI to distribute a large amount of cash to owners.
With the prospects of a superior proposal, we urge the Board of MCI to acknowledge its fiduciary obligations by entering into immediate negotiations with Qwest, by giving Qwest the same access provided to Verizon, and by carefully considering all reasonable alternatives to maximize owner value.
Fairholme has no objection to a merger with any party where MCI's owners are adequately compensated for the company's dominant enterprise business, cash generation, and liquid balance sheet.
Respectfully submitted,

Bruce R. Berkowitz
Managing Member
Fairholme Capital Management, L.L.C.

About The Fairholme Fund and Fairholme Capital Management, L.L.C.

The Fairholme Fund is a registered investment company advised by Fairholme Capital Management, L.L.C. with assets in excess of $300 million. Fairholme Capital Management, L.L.C. is a registered investment adviser managing approximately $1.4 billion for The Fairholme Fund and other clients.
CONTACT: Bruce R. Berkowitz
973.379.6557
Fairholme Capital Management, L.L.C.
Short Hills, New Jersey

Fairholme Capital Management and The Fairholme Fund


CONTACT: Bruce R. Berkowitz, Fairholme Capital Management, L.L.C.,+1-973-379-6557


Web site: http://www.fairholmefunds.com/

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