recently agreed to merge with US "Baby Bell'' US West, appeared in the Wall Street Journal on May 21.

WASHINGTON (The Wall Street Journal) -- In just two years, Global Crossing Ltd. has emerged as a major player in global telecommunications. And with one little-noticed lobbying campaign, the upstart also has proved itself a player in Washington politics.

Global Crossing has taken on a consortium of more than 30 telecommunications companies, including MCI WorldCom Inc., AT&T Corp., SBC Communications Inc.

and Sprint Corp., and delayed government approval of the group's plan to build an undersea telephone cable to Japan -- a cable that would compete with one being built by Global Crossing. The company also has persuaded regulators to consider curtailing the decades-old practice of allowing consortia to own the oceanic cables that provide intercontinental links for phone and Internet traffic.

Global Crossing, based in Bermuda, recruited top Washington advisers, deluged the Federal Communications Commission with paper and personal visits, and embraced an unspoken tenet of business lobbying: Tell Washington your competitors could burn you, while bragging to Wall Street that the same rivals are toast.

The consortium asked the FCC last November for a licence to build and operate its trans-Pacific cable. Such licences usually win approval within a couple of months. But, as a result of Global Crossing's intervention, the consortium's licence remains in limbo.

The company's lobbying campaign has impressed Philip Verveer, whom the consortium hired to counter Global Crossing's effort.

"They put together a story that has attracted a lot of attention, and have succeeded in keeping this thing hung up longer than it should have been,'' Mr.

Verveer says.

FCC officials say they are reluctant to hold up the consortium because trans-Pacific capacity is vital to new telecommunications companies trying to challenge entrenched US giants. The licence is likely to be granted in the next few weeks, perhaps with conditions designed to ensure that the consortium doesn't use its heft to put rivals at a disadvantage. But the FCC also is considering opening a separate inquiry into the potentially anti-competitive effects of having consortia control most of the cable lacing the ocean floor.

Global Crossing and other critics say these consortia are anticompetitive because they tend to include all the big players who otherwise would compete.

Global Crossing says it has had trouble signing up customers for its Pacific cable because the consortium has sponged them all up.

However, Global Crossing didn't appear to feel threatened by the consortium last year. In an August 1998 filing with the Securities and Exchange Commission in advance of its initial public stock offering, the company said having consortia operate undersea cables was "far less effective'' because of deregulation, technological advances and other factors, and that customers were "increasingly receptive'' to independent cables. Global Crossing said it would exploit "the supply and demand imbalance that currently exists and is projected in the global marketplace''. Furthermore, it said, "there is currently enough demand projected to accommodate'' all such trans-Pacific systems.

Both the consortium's and Global Crossing's cables are under construction and on schedule to begin service within the next year. Global Crossing says it didn't intend to have regulators delay or deny the consortium's Japan-US license. The company says it merely asked the FCC to "defer'' licensing until the agency could consider whether the consortium, and others like it, weren't dangerous throwbacks to an era of regulated monopolies.

"If you picked this consortium up out of the sea and put it on land or up in the sky, it would be a slam-dunk: You wouldn't allow it,'' says Greg Simon, a former adviser to Vice President Al Gore who is lobbying for Global Crossing.

He asks why AT&T, which is spending more than $100 billion on its recent acquisitions of cable-television operators, would need the help of more than 30 companies to build a $1.2 billion undersea line. "The answer is,'' Mr.

Simon says, "it gives them incredible market power.'' AT&T and its partners reject these charges, saying their cable is open to all carriers, including Global Crossing. They say the group structure lets smaller companies own part of a cable they probably couldn't build on their own. James Cicconi, AT&T's general counsel, says Global Crossing is "trying to block or delay'' the consortium cable, "so they can try to drive the traffic to their cable. It's an abuse of the regulatory process.'' Global Crossing lobbies against consortium Global Crossing is just the kind of start-up policy makers hoped would emerge after passage of the 1996 law deregulating telecommunications. Founded by financier Gary Winnick, it is transforming itself from a low-cost carrier of trans-oceanic telecom traffic into a one-stop provider of local phone, long-distance and Internet services.

Its stock price has soared from a split-adjusted $9.50 when it went public this past August. But in the past few days, its shares have been pummeled amid investor concerns about its newly minted $35.5 billion merger deal with U S West Inc., the Denver Baby Bell. That deal came on the heels of Global Crossing's plan to buy phone company Frontier Corp. for $11.2 billion.

Global Crossing's surge since going public is rooted in a trans-Atlantic cable the company opened for service last year. That fiber-optic line marked a departure from the way most undersea cables have been built since the 1950s.

Traditionally, small groups of big telecommunications companies teamed up to share the sizeable costs and risks these projects involved. Because each company commanded a monopoly in its home country, it mattered little that they jointly decided how the cable's capacity would be parceled out and priced among themselves and customers.

But construction of these cables often lagged behind demand for new capacity.

Transmission prices were much higher for customers than for the big companies governing the consortia, presenting an opportunity for Global Crossing and other independent challengers who sprang up as the rise of the Internet fueled demand for superfast telecom pipelines.

Global Crossing's Atlantic cable undercut older rivals' prices by as much as 50 percent. Internet service providers and others clamored for capacity on the line, and Global Crossing reaped handsome profits.

The company laid plans for more undersea cables. The first was a $1.2 billion line between the US and Japan to be built with Marubeni Corp., a Japanese trading company. Global Crossing, which owns 58 percent of the joint venture, and its partner promised "the most advanced, highest-capacity telecommunications line.'' That was early last year, and two other groups already were planning trans-Pacific lines. WorldCom, which had yet to close its acquisition of MCI Communications Corp., was planning one with Japan Telecom Co.; and AT&T had teamed with Japanese giant Kokusai Denshin Denwa Corp. to build another. Soon after Global Crossing made its Pacific plans known, the two other groups combined to form the Japan-US consortium, and started recruiting partners.

But even as it prepared its public offering, Global Crossing was seeing signs that its Atlantic triumph might not be repeated in the Pacific. Companies that were customers on its Atlantic cable were signing up as minority owners of the consortium cable. "Something funny was going on,'' says Lodwrick Cook, Global Crossing's co-chairman.

Some prospects told Global Crossing the consortium's prices were better, but Global Crossing salespeople wondered how they could know, since the consortium hadn't disclosed the prices to be charged for transmissions from its shoreline cable stations to cities in Japan and the US Global Crossing felt those prices would be heavily influenced by the companies controlling the stations, the three big Japanese companies and, on the US side, AT&T and MCI WorldCom.

Some customers who opted for the consortium cited "strategic reasons'', Global Crossing officials say. Global Crossing grew suspicious that these companies were afraid that, if they didn't sign up with the consortium, they would have trouble doing business with its big Japanese members.

One company that opted for the consortium was PSINet Inc., a Herndon, Virginia, Internet service provider. Its vice president, John Muleta, says the group offered cheaper, more-flexible service. He says he wasn't concerned that he didn't know precise prices for transmissions within Japan because he felt confident he could negotiate a fair price among the three Japanese companies controlling the shoreline stations there. Eager for a high-speed connection to Japan, PSINet "made a business decision,'' he says.

Whether Global Crossing or the consortium offered better pricing is a matter of sharp dispute in the FCC proceeding, and even FCC officials say they haven't resolved the complex issue yet. But Mr. Muleta says he resents the suggestion that PSINet was intimidated by bigger consortium members.

By November 17, when the consortium applied for its FCC license, it included carriers representing virtually all of the critical traffic between the US and Japan. Global Crossing was struggling to sign up customers, and to date, its progress is "not what we expected, and obviously not what occurred in the Atlantic,'' Mr. Cook says.

So the company turned to the FCC with reluctance, Mr. Cook says, because these carriers "are also our customers in the Atlantic and elsewhere.'' In October, the company called on Washington lawyer Anne Bingaman, former head of antitrust enforcement at the Justice Department. "They asked me if there was a problem with this consortium,'' Ms Bingaman says. "I looked and, boy, did I find one.'' On January 4, Global Crossing filed a ten-page "petition to defer'' with the FCC, characterising the consortium as a "collusive system'' that "would appear to harm incumbent carriers, end users and new entrants in the market''.

By then, its lobbying team included Mr. Simon; Peter Cowhey, the former chief of the FCC's International Bureau, and economist Andrew Joskow, formerly of the Justice Department.

Messrs. Cowhey and Joskow prepared studies intended to show how the consortium could coerce rivals into joining its cable project, even though the companies that controlled the shoreline stations could charge them excessive prices -- and slow the erosion of international phone rates. In meetings with FCC staff and commissioners, Mr. Simon argued that there had to be some explanation for Global Crossing's lack of success in the Pacific. "Gary Winnick didn't just get stupid,'' he would say.

But these concerns rarely surfaced in Global Crossing's public statements or SEC filings. The Pacific cable was mentioned briefly in a February 1 news release on fourth-quarter results, but nothing was said about the consortium issue. On April 28, Chief Executive Officer Robert Annunziata extolled "soaring demand for telecommunications in Asia'', and said the company would accelerate the service kickoff for its Pacific cable to December 31.

The company made one reference to its Pacific woes in a March 31 filing with the SEC. Adding a line to its previous statements about plentiful trans-Pacific demand, the company acknowledged "a number'' of its customers on the Atlantic cable would buy trans-Pacific capacity on "systems they are sponsoring''.

Global Crossing said yesterday that it has kept a low profile on the matter "so as not to offend customers unnecessarily. As for our SEC filings, we have always identified club cables as our biggest competitive threat, but we believe on the whole that we have been and will continue to be successful against them. Of course, we also believe we would be even more successful if they were not permitted.'' It is "premature,'' the company said, "to suggest in our SEC filings that the legality of club cables is in question. It is more conservative from a disclosure perspective to assume that club cables will be there as competitors.'' FCC staffers were intrigued by Global Crossing's contentions about the consortium. Worried, the consortium hired Mr. Verveer, a former Justice Department and FCC staffer, to lead a counterattack. He argued that the FCC had long condoned consortia as an efficient and legal way of building undersea cable, and noted that the consortium had followed earlier agency advice by opening its cable to numerous carriers.

PSINet's Mr. Muleta and officials representing other smaller carriers started showing up at the FCC to argue that Global Crossing was trying to make up on the regulatory front what it had lost on the business battlefield. Mr. Simon dismisses such tactics: "They trot out the little companies as human shields for AT&T.''