Verizon Sees National Security Concerns in Qwest MCI Bid
Verizon came out swinging Mon. against Qwest, its rival to acquire MCI, alleging that “cash-strapped” Qwest’s possible ownership of MCI’s Internet backbone would have implications for national security. Verizon Exec. Vp Tom Tauke had Verizon’s first substantial comments on Qwest’s offer in remarks to the Emerging Issues Policy Forum in Fla. The event is closed to the press, but Verizon released a news release containing his comments. Sources said Verizon doesn’t plan a continuing fight with Qwest, especially since at this point it is MCI’s designated partner.
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“We announced our plans to invest substantially in MCI’s network and systems to continually upgrade those assets,” Tauke said. “Qwest has made no such commitments. They may even close MCI’s Internet backbone and long- distance network, something that would result in less competition, more concentration and fewer choices.”
Tauke argued that the net effect is potentially dangerous. “We don’t believe any of this can be good for consumers or MCI’s govt. or national security-related customers,” he said. “In our view, a Qwest-MCI combination is not in the public interest or the interest of ordinary shareholders and bondholders concerned about creating value over the long-term.”