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CWA Calls Proposed Sale of MCI Internet Assets "Corporate Shell Game": Deal would not ease anti-comp
The Communications Workers of America (CWA) said today that the proposed sale of MCI's internet assets is a " corporate shell game" that would not reduce the anti-competitive impact of the proposed merger of MCI and WorldCom.
CWA President Morton Bahr told the Justice Department that the basic freedom and affordability of the Internet would be seriously threatened by a merged MCI-WorldComödespite promises from the companies to sell small parts of their Internet operations.
" The proposed partial sale of some of internetMCI's assets to Cable and Wireless will not resolve the anti-competitive impact of the merger in the Internet market. There is no way that any halfway solution is good for the Internet, the consumer or the American worker," Bahr said.
In his letter to Joel Klein, Assistant Attorney General of the Justice Department's Antitrust Division, Bahr stressed, " Only complete divestiture of either WorldCom's Internet backbone businessö UUNet, ANS, CompuServe, Gridnet, and a minority interest in Verioö or internetMCI and complete divestiture of WorldCom's ownership of the MAE-East and MAE-West public interconnection points will ensure that the Internet backbone suffers no anti-competitive effects from this merger."
" This half-way solution does nothing to lessen our concerns," Bahr said. Published reports indicate MCI is planning to sell only its Internet hardware and Internet access reseller customer base to Cable and Wireless. " This partial sale would result in the transfer of only 50 employees, leaving Cable and Wireless without the technical and engineering expertise and sales, marketing, and customer care workforce capable of servicing and growing its Internet business. The $625 million announced purchase price indicates the limited nature of the proposed sale in terms of customer base, network infrastructure, and revenue-generating potential. For comparison purposes, UUNET has a market value of $7 to $8 billion," he noted.
Bahr cautioned that allowing the proposed MCI-WorldCom merger to go forward could have a chilling effect on Internet expansion, innovation, and affordability. " The time to protect the Internet's affordability and freedom is now. WorldCom and MCI should not be allowed to game the antitrust system with this hollow partial divestiture," Bahr said.
And in addition to concerns about monopoly control of the Internet, there are other anti-competitive issues that must be addressed, CWA pointed out. CWA is the nation's largest telecommunications union, representing 650,000 members.
CWA President Morton Bahr told the Justice Department that the basic freedom and affordability of the Internet would be seriously threatened by a merged MCI-WorldComödespite promises from the companies to sell small parts of their Internet operations.
" The proposed partial sale of some of internetMCI's assets to Cable and Wireless will not resolve the anti-competitive impact of the merger in the Internet market. There is no way that any halfway solution is good for the Internet, the consumer or the American worker," Bahr said.
In his letter to Joel Klein, Assistant Attorney General of the Justice Department's Antitrust Division, Bahr stressed, " Only complete divestiture of either WorldCom's Internet backbone businessö UUNet, ANS, CompuServe, Gridnet, and a minority interest in Verioö or internetMCI and complete divestiture of WorldCom's ownership of the MAE-East and MAE-West public interconnection points will ensure that the Internet backbone suffers no anti-competitive effects from this merger."
" This half-way solution does nothing to lessen our concerns," Bahr said. Published reports indicate MCI is planning to sell only its Internet hardware and Internet access reseller customer base to Cable and Wireless. " This partial sale would result in the transfer of only 50 employees, leaving Cable and Wireless without the technical and engineering expertise and sales, marketing, and customer care workforce capable of servicing and growing its Internet business. The $625 million announced purchase price indicates the limited nature of the proposed sale in terms of customer base, network infrastructure, and revenue-generating potential. For comparison purposes, UUNET has a market value of $7 to $8 billion," he noted.
Bahr cautioned that allowing the proposed MCI-WorldCom merger to go forward could have a chilling effect on Internet expansion, innovation, and affordability. " The time to protect the Internet's affordability and freedom is now. WorldCom and MCI should not be allowed to game the antitrust system with this hollow partial divestiture," Bahr said.
And in addition to concerns about monopoly control of the Internet, there are other anti-competitive issues that must be addressed, CWA pointed out. CWA is the nation's largest telecommunications union, representing 650,000 members.