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CWA Commends Justice Department Action to Block WorldCom-Sprint Mega-Merger
The Communications Workers of America applauded today's decision by the U.S. Department of Justice to take action to stop the mega-merger of WorldCom and Sprint Corp.
In announcing its intent to file suit to block WorldCom's acquisition of Sprint, the Justice Department cited serious concerns for competition in both long distance service and the Internet backbone that would result from this merger.
If the merger were to go forward, just two large carriers would be providing long distance service, and consumers and businesses would pay the price, the Justice Department noted. Further, the deal would give the merged company monopoly control over the Internet backbone and allow WorldCom to dominate that market, a move likely to restrict competition and stifle innovation, the department said.
CWA President Morton Bahr said the evidence was clear that the merger was harmful for consumers, competition and employees, adding "the Justice Department is exactly right to reject this merger."
"CWA has been making the case, to federal and state regulators and other entities, that this merger would cause irreparable harm not only to Internet and long distance competition but to consumers," he said. "The continued development of the Internet and global telecommunications requires more competition and innovation, not less, and certainly not the solutions proposed by WorldCom and Sprint," Bahr said.
Given WorldCom's track record in its previous divestiture - the flawed spinoff of MCI's Internet holdings to Cable and Wireless- it is unlikely that WorldCom could propose a divestiture plan that could resolve regulators' and consumers' concerns, Bahr said.
In announcing its intent to file suit to block WorldCom's acquisition of Sprint, the Justice Department cited serious concerns for competition in both long distance service and the Internet backbone that would result from this merger.
If the merger were to go forward, just two large carriers would be providing long distance service, and consumers and businesses would pay the price, the Justice Department noted. Further, the deal would give the merged company monopoly control over the Internet backbone and allow WorldCom to dominate that market, a move likely to restrict competition and stifle innovation, the department said.
CWA President Morton Bahr said the evidence was clear that the merger was harmful for consumers, competition and employees, adding "the Justice Department is exactly right to reject this merger."
"CWA has been making the case, to federal and state regulators and other entities, that this merger would cause irreparable harm not only to Internet and long distance competition but to consumers," he said. "The continued development of the Internet and global telecommunications requires more competition and innovation, not less, and certainly not the solutions proposed by WorldCom and Sprint," Bahr said.
Given WorldCom's track record in its previous divestiture - the flawed spinoff of MCI's Internet holdings to Cable and Wireless- it is unlikely that WorldCom could propose a divestiture plan that could resolve regulators' and consumers' concerns, Bahr said.
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