WorldCom Inc. and Sprint Corp. lawyers were in Brussels, Belgium, last week defending their proposed $115 billion merger to the European Commission.
The EC issued a statement of objections to the merger late last month.
A decision is expected by July 12, said Sprint spokesman Mark Bonavia. The commission in February extended its investigation of the deal by an additional four months because of potential problems.
The EC primarily is concerned the combined entity would control too much access to the Internet. WorldCom and Sprint last fall agreed to merge in a deal that will combine the second- and third-largest U.S. long-distance carriers and give WorldCom a much-needed nationwide wireless presence.
At a closed-door EC hearing last Tuesday, WorldCom argued that plenty of competition exists in the Internet business, while Sprint reiterated its willingness to sell its Internet backbone, confirmed Bonavia.
WorldCom already has indicated it won’t sell its Internet subsidiary, which could hamper the merger if regulators make that a condition for the deal. The EC required MCI to sell its Internet business in 1998 as a condition of its merger with WorldCom.
U.S. Justice Department antitrust lawyers reportedly oppose the merger as well, according to recently published reports. WorldCom Chairman Bernard Ebbers and Sprint Chairman William Esrey are expected to meet Justice antitrust chief Joel Klein in the coming weeks. The companies are hopeful Klein will take a broader view of the proposed merger as opposed to the strict antitrust analysis conducted by Justice lawyers.
“When we signed the merger agreement, we knew the government would take the traditional long-distance market and many other factors into account in its consideration of the deal,” WorldCom spokesman Peter Lucht recently told RCR. “We believe the dramatic changes affecting the telecommunications industry-including technological developments, changes in the competitive landscape and in consumer demand-would lead DOJ to decide that this merger should be approved.”
If the merger falls apart-which would be one of the very few to do so to date-WorldCom would be back in the hunt for a mobile-phone partner. Nextel Communications Inc. and Voice-Stream Wireless Corp. have been mentioned as possible candidates for WorldCom, which today resells wireless service.
