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CWA: California PUC Should Reject MCI WorldCom-Sprint Merger Bid: Company Reneged on Commitment to L
MCI WorldCom failed to fulfill a commitment made 16 months ago to provide local service for residential customers in California; therefore, its current promises about service and competition cannot be accepted at face value, the Communications Workers of America told the California Public Utilities Commission.
CWA called on the state commission to hold hearings on the proposed merger of MCI WorldCom and Sprint Corporation, particularly in light of MCI WorldCom's failure to enter the residential local market. "It appears that MCI WorldCom did mislead the Commission" in 1998, CWA charged, adding that new claims of enhanced competition made by MCI WorldCom and Sprint must be viewed with considerable skepticism.
Other promises made by MCI and WorldCom 16 months ago also have been broken, including a commitment to create 10,000 new jobs, CWA said. Instead, the merged company added no new jobs, but laid off 3,750 employees.
Contrary to the companies' claims, the mega-merger will in fact harm competition, particularly in long distance and Internet services. The merged company would control of 37 percent of the long-distance market and would gain monopoly control in the Internet backbone market, causing significant harm to California consumers and businesses, CWA pointed out.
Industry analysts have predicted that a merged MCI WorldCom and Sprint will place even less focus on the consumer business, CWA told the commission, adding that Sprint's poor track record in operating and managing its own local exchange systems would be more bad news for California consumers. "Sprint has diverted local ratepayer money to finance expansion in wireless, Internet and international operations" and local service quality for 7.9 million customers has suffered, CWA said.
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CWA called on the state commission to hold hearings on the proposed merger of MCI WorldCom and Sprint Corporation, particularly in light of MCI WorldCom's failure to enter the residential local market. "It appears that MCI WorldCom did mislead the Commission" in 1998, CWA charged, adding that new claims of enhanced competition made by MCI WorldCom and Sprint must be viewed with considerable skepticism.
Other promises made by MCI and WorldCom 16 months ago also have been broken, including a commitment to create 10,000 new jobs, CWA said. Instead, the merged company added no new jobs, but laid off 3,750 employees.
Contrary to the companies' claims, the mega-merger will in fact harm competition, particularly in long distance and Internet services. The merged company would control of 37 percent of the long-distance market and would gain monopoly control in the Internet backbone market, causing significant harm to California consumers and businesses, CWA pointed out.
Industry analysts have predicted that a merged MCI WorldCom and Sprint will place even less focus on the consumer business, CWA told the commission, adding that Sprint's poor track record in operating and managing its own local exchange systems would be more bad news for California consumers. "Sprint has diverted local ratepayer money to finance expansion in wireless, Internet and international operations" and local service quality for 7.9 million customers has suffered, CWA said.
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