Sens. Kohl (D-Wis.) and DeWine (R-O.), respectively chmn. and ran...
Sens. Kohl (D-Wis.) and DeWine (R-O.), respectively chmn. and ranking member Judiciary Antitrust Subcommittee, expressed concerns to FCC Chmn. Powell about his comments that he could be supportive of WorldCom merger with Bell company. “We do not believe that…
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the present economic difficulties in certain segments of the industry justify a relaxation of carefully established principles against combining local and long distance phone companies, nor do we believe such consolidation furthers the goals of the 1996 Telecom Act,” said July 16 letter. They said Powell’s comments appeared to be based on “failing firm” rationale, which permits mergers when industry is in dire economic strait that normally would be considered anticompetitive. “We are far from that situation,” they said. “Although WorldCom may be on the verge of bankruptcy, it likely has genuine reorganization prospects, and we should encourage WorldCom’s efforts to maintain its place in the market rather than offer the false hope of an early way out via merger.” Potential WorldCom-Bell merger would raise difficult Sec. 271 issues in many states. “At the very least, such a merger would raise complicated competition and customer service issues,” letter said. “At the worst, it could effectively unravel the core concepts of the Telecom Act.”