Consumers Union and the Consumer Federation of America are callin...
Consumers Union and the Consumer Federation of America are calling on the Senate Judiciary Committee to hold a hearing on the recent telecom merger announcements. The consumers groups said scrutiny was needed urgently and before the mergers are completed.…
Sign up for a free preview to unlock the rest of this article
Timely, relevant coverage of court proceedings and agency rulings involving tariffs, classification, valuation, origin and antidumping and countervailing duties. Each day, Trade Law Daily subscribers receive a daily headline email, in-depth PDF edition and access to all relevant documents via our trade law source document library and website.
The consumers groups’ letter referred to the proposed AT&T-SBC merger and Verizon’s bid to acquire MCI. The letter said MCI’s decision to accept a smaller bid from Verizon than accept Qwest’s larger offer raised an “especially large red flag.” “The acquiring firm will claim that there are synergies, but there is a more likely answer that should be a concern to the Judiciary Committee: Market power,” the letter said. The groups said since MCI competed more vigorously in Verizon’s territory than in Qwest’s territory, a merger with Qwest would raise fewer competitive concerns. A Qwest-MCI merger would have a “weak regional base” that would have to compete outside its territory, the groups said, while the merged Verizon-MCI would be a dominant regional company “whose primary focus would be on solidifying its market power within its region.” “Antitrust authorities and regulators must now take a broader view of the industry structure and this Committee should send a clear signal that maximum competition is paramount,” the letter said. The groups said it might be considered early to hold hearings while the “deal making is not done,” but the mergers pose “an extraordinary challenge to the policy framework the Congress set for the industry in the Telecommunications Act” and the Committee should act immediately. The letter was sent to Senate Judiciary Chmn. Specter (R-Pa.), ranking Democrat Leahy (Vt.), Judiciary Antitrust Subcommittee Chmn. DeWine (R-O.) and subcommittee ranking Democrat Kohl (Wis.) DeWine and Kohl have already released a joint statement expressing concern about the merger and vowing closer scrutiny. The House Commerce Committee has tentatively scheduled a hearing on the topic for Wed., March 2.