OT> Sprint Joins Consumer, Business Groups to Oppose SBC/Ameritech Merger Before Wisconsin PSC
November 10, 1998
KANSAS CITY, Mo., Nov. 9 /PRNewswire/ An unprecedented
alliance of consumer, business and
telecommunications industry representatives
today jointly petitioned the Wisconsin Public
Service Commission (WPSC) to investigate
and review the proposed merger of Ameritech
and SBC Communications, calling the merger
"an ill-conceived alliance intended to
recreate the Bell system monopoly over
telecommunications services. "
The petitioners, which include Sprint, the
Citizens' Utility Board, the Wisconsin
Merchants Federation, the American
Association of Retired Persons, and the
Wisconsin chapter of the National Federation
of Independent Businesses each have
different missions, but are unanimous in their
concern that the proposed merger will
negatively impact Wisconsin consumers and
businesses, they said.
The petitioners called for the WPSC to assert
its general supervisory jurisdiction and
conduct an investigation and hearings that
would provide clear evidence of the merger's
impact on competition in Wisconsin local
phone service.
For consumers, the merger would eliminate
SBC as a potential choice in local phone
service in Wisconsin, and would give the
merged company greater ability to keep
other competitors out, the petition said. The
loss of competition would reduce the
incentive to lower rates, would stifle new
products and services that consumers and
businesses want, and likely would result in a
reduction in service quality, petitioners told
the commission.
"If you don't like paying high prices for call
waiting or caller ID today -- too bad. There
won't be anyone else offering Wisconsin
customers local service at a better price if
this merger goes through and eliminates
competition," said Ellen D'Amato, Sprint Vice
President for State External Affairs.
"The SBC/Ameritech merger -- along with the
proposed Bell Atlantic/GTE merger -- should
be of dire concern to everyone in America
because we could be faced with two giant
corporations owning more than two thirds of
the nation's telephone lines. Essentially,
Americans would be at the mercy of a Bell
East and a Bell West monopoly," she added.
The states of Illinois, Ohio and Indiana are
investigating and will hold hearings on the
SBC/Ameritech merger, which would be the
largest merger of utility companies in the
history of the United States.
The Wisconsin petition noted that former
Pacific Bell customers faced significant
service problems and an increase in rates
after that company was bought by SBC.
Service quality complaints have at least
doubled since the Pacific Bell purchase, and
anti-consumer behavior and abusive
marketing practices by SBC have been
reported, the petition said.
Given that the Wisconsin commission already
has taken action against Ameritech because
of service problems, and the record of SBC
service problems, "this commission should
review the proposed merger to ensure that
consumers are protected adequately," the
petition said.
The merger also would threaten the long
distance competition that has benefited
consumers and reduced rates for years,
petitioners told the commission. Long
distance companies almost always must rely
on a connection through the local phone
company to serve their customers. In the
case of Sprint, the merged company would
control the territory where more than 45
percent of Sprint long distance calls begin
and end, giving the merged company even
more incentive and opportunity to restrict
competition in long distance as well as local
service.
"These companies claim their enormous size
is necessary to compete, and that big
companies are more innovative than smaller
companies. But the truth is that competition,
not size, is what drives innovation and
consumer service, " D'Amato said.
In its investigation, the commission should
specifically examine the companies' claims of
financial and other benefits from the merger,
the allocation of such benefits to Wisconsin
consumers, the impact on regulating decision
makers in a distant state and the potential
for "price squeeze" behavior against
competitors, the petition said.
She added, "We believe that, faced with the
facts, the Wisconsin Public Service
Commission will determine that this merger
will have many significant adverse effects on
Wisconsin consumers and businesses by
reducing competition, diversity and consumer
choice in local telephone service. We call on
the commission to investigate the proposal
fully."
Sprint is a global communications company --
at the forefront in integrating long distance,
local and wireless communications services
and one of the world's largest carriers of
Internet traffic. Sprint built and operates the
United States' only nationwide all-digital,
fiber optic network and is the leader in
advanced data communications services.
Sprint has $15 billion in annual revenues and
serves more than 16 million business and
residential customers.
SOURCE Sprint |
