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Technology Stocks : Broadband Wireless Access [WCII, NXLK, WCOM, satellite..]
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To: ftth who wrote (451)6/30/1999 9:54:00 AM
From: SteveG  Read Replies (1) of 1860
 
<A> WSJ(6/30):U.S./Undersea -2: No Confirmation Of Cos Named
By Bryan Gruley

(BTW, will follow up with DSL response - have been in overload.)


WASHINGTON (Dow Jones)--The Justice Department is investigating possible
anticompetitive practices in the undersea-cable business involving many of
the world's largest telephone companies.

A department spokeswoman confirmed that antitrust enforcers are "looking
at the possibility of anticompetitive practices in the international
undersea-cable industry." She declined to elaborate.

The investigation could lead to substantial changes in the way phone
companies sell voiceand data-transmission services around the world. For
decades, the business has been controlled by AT&T Corp. and a handful of
other big companies that formed consortia to build and operate undersea
cables. But the business has exploded with the growth of the Internet,
spawning rivals such as Global Crossing Ltd. that have challenged the
groups' ways.

It couldn't be determined late yesterday which companies had been notified
of the Justice Department's investigation. A spokesman for Sprint Corp.
confirmed the company received an 18-page subpoena from the Justice
Department concerning practices of a 30-plus member consortium that is
building a $1.2 billion undersea cable between the U.S. and Japan. He
declined to elaborate.

Other members of the trans-Pacific consortium include AT&T, MCI WorldCom
Corp., Qwest Communications and Level 3 Communications. An AT&T spokesman
declined to comment. The other companies couldn't be reached immediately for
comment.

Global Crossing, the two-year-old company that had its first success
competing against a similar consortium in the Atlantic Ocean, complained to
the Justice Department and the Federal Communications Commission earlier
this year that the trans-Pacific consortium had engaged in illegal practices
designed to deter new competitors.

Greg Simon, a Washington lobbyist for Global Crossing, said yesterday "The
Justice Department's interest shows this kind of underwater monopoly will
not stand the light of day."

Consortium members have denied Global Crossing's claims, telling the FCC
that their venture is a legal and efficient way of building undersea cable.
The FCC is still considering whether to grant the consortium a trans-Pacific
license.

Traditionally, small groups of big telecommunications companies teamed up
to share the sizable costs and risks these projects involved. Because each
company commanded a monopoly in its home country, it mattered little that
they jointly decided how the cable's capacity would be parceled out and
priced among themselves and customers.

But construction of these cables often lagged behind demand for new
capacity. Transmission prices were much higher for customers than for the
big companies governing the consortium, presenting an opportunity for Global
Crossing and other independent challengers who sprang up as the rise of the
Internet fueled demand for superfast telecom pipelines.

Global Crossing has told the FCC that the consortium has used its control
of cable landing stations in Japan to coerce smaller partners into joining
the consortium, rather than buying service from Global Crossing.
(END) DOW JONES NEWS 06-30-99
04:01 AM
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