As I understand it, Mcic is selling off just its internet backbone business, and not its ISP retail business. The former has significant overlaps with Uunet/Wcom, the later does not. Because Worldcom has little ISP retail business (but a huge backbone business).
This is not at all what GTE, Sprint and other competitors would like. But I also think it will be hard for the regulators to turn it down.
The voice phone side of the merger is HUGELY pro-competitive. It's the first and only real competitive threat to the incumbent local Bell operating companies.
The real advantage to adding MCI on the internet side is to add its name, consumer recognition, and its retail internet accounts. Since Wcom has relatively few retail internet accounts, it will be hard for the regulators to turn down the combination in this form. Even though they (and especially Wcom's worried competitors) would have far preferred to see Uunet divested.
And, the Mci backbone assets divested can be relatively easily replaced. This is an argument that GTE is already making. But from a regulatory standpoint, so what? If Wcom can replace it, why can't competitors create their own?
Doug
|
