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CWA: WorldCom-Sprint Merger Would Mean Irreparable Harm to Internet, Long Distance Competition
For Immediate Release
The Communications Workers of America renewed its call for the U.S. Department of Justice to block the proposed merger of WorldCom and Sprint Corp., citing growing evidence that the merger would cause irreparable harm to competition in the Internet backbone and long distance markets.
In a letter today to Assistant Attorney General Joel Klein, who heads the Department's anti-trust division, CWA President Morton Bahr stressed that the outcome of this merger decision was of "critical importance to the future of the Internet and the long distance industry."
Bahr summarized the mounting evidence that the mega-merger would be harmful to consumers, competition and employees and stressed that the solutions being offered by WorldCom and Sprint would not resolve these problems.
Not only have WorldCom and Sprint failed to offer a divestiture proposal that resolves the competition problems posed by this merger, the two companies propose to repeat the same tactics that allowed MCI and WorldCom to sabotage the 1998 divestiture of MCI's Internet holdings to Cable and Wireless, Bahr wrote.
In his letter, Bahr cited news reports indicating that the Competition Directorate of the European Commission had concluded that the merger should be rejected by the EC because the divestiture plan proposed by Sprint and WorldCom did not resolve the anti-competitiveness and harm to EC consumers - particularly in the Internet backbone and global telecommunications markets - that would result from the merger.
Without an effective divestiture plan to ensure that a viable competitor would replace the competition and services lost - as well as the mechanisms to enforce such a divestiture - the department should reject this merger, Bahr said. "Since it appears that WorldCom and Sprint have not proposed an effective remedy, the Department of Justice, working with the European Commission, should block this proposed merger," he concluded.
The Communications Workers of America renewed its call for the U.S. Department of Justice to block the proposed merger of WorldCom and Sprint Corp., citing growing evidence that the merger would cause irreparable harm to competition in the Internet backbone and long distance markets.
In a letter today to Assistant Attorney General Joel Klein, who heads the Department's anti-trust division, CWA President Morton Bahr stressed that the outcome of this merger decision was of "critical importance to the future of the Internet and the long distance industry."
Bahr summarized the mounting evidence that the mega-merger would be harmful to consumers, competition and employees and stressed that the solutions being offered by WorldCom and Sprint would not resolve these problems.
Not only have WorldCom and Sprint failed to offer a divestiture proposal that resolves the competition problems posed by this merger, the two companies propose to repeat the same tactics that allowed MCI and WorldCom to sabotage the 1998 divestiture of MCI's Internet holdings to Cable and Wireless, Bahr wrote.
In his letter, Bahr cited news reports indicating that the Competition Directorate of the European Commission had concluded that the merger should be rejected by the EC because the divestiture plan proposed by Sprint and WorldCom did not resolve the anti-competitiveness and harm to EC consumers - particularly in the Internet backbone and global telecommunications markets - that would result from the merger.
Without an effective divestiture plan to ensure that a viable competitor would replace the competition and services lost - as well as the mechanisms to enforce such a divestiture - the department should reject this merger, Bahr said. "Since it appears that WorldCom and Sprint have not proposed an effective remedy, the Department of Justice, working with the European Commission, should block this proposed merger," he concluded.
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