Telecoms rivals insist on greater concessions

Date: 08/06/2000

By Peter Chapman

EU AND US regulators should not be duped into accepting too few concessions from American telecoms and Internet goliaths MCI WorldCom and Sprint in return for approving their €130-billion merger, insist the deal's opponents.

At hearings in Brussels behind closed doors last week, the two companies came under pressure to respond to fears that the planned merger would sew up 55% of the behind-the-scenes technology or 'backbone' which makes the Internet work. MCI WorldCom and Sprint are part of an elite band of five US firms through which most of the world's Internet traffic - including much of the EU's - is routed.

But rivals who attended last week's meetings insist regulators must go way beyond the remedies which have so far been suggested. These include an agreement by Sprint to hive off its Internet business Sprint Link, or, less likely, a potentially deal-breaking sale of MCI WorldCom's cherished UUNet Internet unit.

Sources at pan-European network company Global Telesystems insist any sale of Sprint Link should include Sprint's huge long-distance fibre optic network in the US. Otherwise they claim, Sprint Link would wilt under competition from its stronger rivals because it would only own the Internet routing technology and client list, but would rely on other companies' networks to actually transport data.

The world-wide Union Network International, which represents communication workers across the globe, also insists regulators must ensure that the companies live up to any concessions they promise to make, arguing that WorldCom and MCI failed to do so when they merged two years ago. MCI was accused of selling a mere shell of its Internet company to the UK's Cable and Wireless after retaining key staff and client lists.

The Commission is expected to rule on the deal next month.

EU and US regulators should not be duped into accepting too few concessions from American telecoms and Internet goliaths MCI WorldCom and Sprint in return for approving their €130-billion merger, insist the deal's opponents.