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CWA Urges Public Hearings in California, Virginia on Proposed MCI/WorldCom Merger

The Communications Workers of America is continuing to raise government and public concern about the negative effects of the proposed merger of WorldCom Inc. and MCI Communications Corp., particularly in these areas: access and control over the Internet, universal service, and restricting competition in the local and long distance markets.

In documents filed today with the California Public Utilities Commission and the Virginia State Corporation Commission, CWA pressed state authorities to reject WorldCom's request for expedited review of its bid to take over MCI and to hold full evidentiary hearings on how the public interest would be harmed by this merger.

A merged MCI/WorldCom would control more than 63 percent of the United States Internet backbone market and drastically affect competition, CWA pointed out in its California PUC filing. aThis merger would transform the current vibrant competitive Internet access market into one in which the merged entity would have the market power to set the price of and the rules for Internet access,„ the CWA filing noted, a serious problem anywhere but especially in California where athe explosive growth of the Internet has been a major factor driving the economy„ of the state.

The proposed merger would harm universal service by shifting revenues from the public switched network to the private MCI-WorldCom network, adversely affecting service for public utility ratepayers in California and other states, the CWA filing pointed out.

In calling for hearings in both California and Virginia, CWA stressed that abecause MCI, WorldCom and the Internet are not regulated, the petition for approval of the plan of merger is the only opportunity„ for states to review whether this merger is in the best interest of their citizens.

CWA also has protested WorldCom's proposed acquisition of MCI to the Federal Communications Commission and will make the case to the U.S. Justice Department that the deal violates federal anti-trust laws. CWA President Morton Bahr called the deal aanti-competitive, as defined by both the Telecommunications Act and the FCC's public interest guidelines.„

The FCC filing charged that the merger would give the company near monopoly controlö more than 63 percentö over the Internet backbone; would violate the pro-competitive intent of the Telecommunications Act by stifling local and long distance competition; and would severely retard the delivery of universal service. The merger also would cut job growth in the industry by more than 75,000 jobs over the next four years, because MCI/WorldCom has indicated it will curb MCI's planned investment in local network development by as much as $5.3 billion over four years.

Internationally, member organizations of Communications International ö the former Postal, Telegraph and Telephone International, a worldwide federation representing five million communications workersö are pressing the European Commission to oppose the merger because it athreatens competition in European Union markets and will represent an enormous danger for European telecom operators,„ wrote CI General Secretary Philip Bowyer to Commissioner Karl Van Miert.

CWA is the nation's largest telecommunications union, representing 650,000 members nationwide, with 65,000 in California and 9,000 in Virginia.

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