EU Extends MCI WorldCom-Sprint Probe

AP Online
02-21-2000
EU Extends MCI WorldCom-Sprint Probe

BRUSSELS, Belgium (AP) -- European Union regulators have extended their probe into MCI WorldCom Inc.'s $130 billion bid for Sprint Corp. by an additional four months, the European Commission said Monday.

The EU regulators are concerned about the giant U.S. telecommunications merger's impact on access to the so-called Internet backbone; the trans-Atlantic telephone market and services to multinational businesses, said Michael Tscherney, the commission spokesman on antitrust issues.

In a statement, the commission said it has serious doubts about the companies' control of the Internet backbone. According to the commission's figures, the Clinton, Miss.-based MCI WorldCom has between 30 percent and 40 percent of that market while the Westwood, Kan.-based Sprint has around 10 percent.

The commission fears the merged company's leading role would erode the current system under which companies offering top-level connectivity on the Internet backbone carry other companies' traffic for free in return for the same privilege on other carriers' systems.

In an effort to meet concerns about the business services and trans-Atlantic telephone call side of the merger, Sprint sold its stake in the Global One venture with European carriers Deutsche Telekom and France Telecom in January.

However the EU Commission said it still has concerns.

``The Commission will also look at how the market for international voice telephony on the EU-U.S. route might be affected as the merger may lead to MCI Worldcom/Sprint and AT&T having bottleneck control on the U.S. end,'' it said in a statement.

The commission is also concerned about the market for global telecommunications services to multinational companies.

``Together with the Concert alliance, the merged entity would appear to control the majority of the market'' for services to multinational companies, it said. Concert is an alliance between British Telecom and AT&T.

The EU Commission said it rejected the companies' argument that the Global One sale would remove its concerns over internet access, multinational business services and transatlantic calls.

``Given the negligible involvement of Global One in the market for top-level internet connectivity this undertaking could not remove the serious doubts raised,'' the commission said.

It also said it will continue to work closely with the U.S. Federal Communications Commission and the Department of Justice in assessing the deal.

The EU decision comes a few days after the end of the FCC's comment period. The proposed merger has come under criticism in the United States because of concern over the long-distance telephone and Internet access markets.

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