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Technology Stocks : Global Crossing - GX (formerly GBLX) -- Ignore unavailable to you. Want to Upgrade?

To: M. Charles Swope who wrote (1262)	6/30/1999 1:22:00 PM
From: M. Frank Greiffenstein	Read Replies (1) \| Respond to of 15615

I think so to! Yes, this could be good for GBLX if its competitors are held up. In the mean time, any idea when FRO and UWST make their decisions regarding QWST? Is there a deadline? DocStone

To: M. Charles Swope who wrote (1262)	7/1/1999 7:55:00 AM
From: Teddy	Read Replies (1) \| Respond to of 15615

Looks like the "Under-Water-Gate" investigation is going to take a while. Should be interesting. The Wall Street Journal -- July 1, 1999 FCC Set to Join Undersea-Cable Probe, Increasing Odds for Changes in Industry ---- By Bryan Gruley Staff Reporter of The Wall Street Journal WASHINGTON -- The Federal Communications Commission is preparing to open its own inquiry into the undersea-cable business, which already is under antitrust scrutiny by the Justice Department. The FCC inquiry increases the odds that regulators will force significant changes in one of the most obscure but fastest-growing segments of the global telecommunications business. While the Justice Department's investigation focuses on a single trans-Pacific cable operated by a consortium of telecommunications companies, the FCC inquiry would look more broadly at how various consortia build and operate underwater cables. Critics say consortia have used their clout to keep international calling rates from falling faster. "We're very interested in exploring these issues on a global basis and figuring out what needs to be done," one FCC official said. If the agency finds anticompetitive practices, it could write rules to curtail the use of consortia to operate undersea cables, or impose conditions on existing cables. But the FCC still plans to grant a license to a consortium of more than 30 companies building an undersea cable between the U.S. and Japan, including AT&T Corp., MCI Worldcom Corp., Sprint Corp. and three big Japanese phone companies. That consortium is the focus of the Justice Department's investigation and has been scrutinized by the FCC for months. FCC Chairman William Kennard is reluctant to hold up the license because trans-Pacific capacity is vital to new telecommunications companies trying to challenge entrenched giants in the U.S. Both the Justice Department and the FCC are responding to complaints made by Global Crossing Ltd., the two-year-old company that is building its own trans-Pacific cable. Philip Verveer, a Washington attorney for the consortium, said Global Crossing's complaints are echoed point by point in the demands for information ma de by the Justice Department in an 18-page subpoena sent to consortium members. The consortium repeatedly has told the FCC that Global Crossing is trying to use regulators to slow down a competitor. The consortium also has told the FCC that it and other consortia offer a legal and efficient means of building undersea cables. Said Mr. Verveer: "If consortium cables go away, it isn't going to be because of an antitrust issue; it's going to be because of changes in technology and demand. I don't think there's any reason at all for members of the consortium to be concerned." But stocks of several consortium members took a hit in trading yesterday, partly because of news of the antitrust probe. MCI Worldcom slid $7.5625, or 8.1%, to $86.0625 in Nasdaq Stock Market trading, while Sprint Corp. (PCS Group) fell $2.75, or 4.6%, to $57 in New York Stock Exchange composite trading. Mark Zohar, a senior analyst with Forrester Research in Cambridge, Mass., said the investigations portend well for consumers. "This can only force bandwidth prices down," he said. "If these consortia are determined to be anticompetitive and are broken up, we're going to see much more demand and [undersea] players getting in and prices dropping." Also, some of the smaller members of the consortium may welcome the FCC inquiry, because it could make it easier for them to get international capacity without having to join consortia. A spokeswoman confirmed the Justice Department is investigating "the possibility of anticompetitive practices in the international undersea cable industry." Since the 1950s, small groups of big telecommunications companies have teamed up to share the sizable costs and risks of building undersea cables. But with deregulation, technological advances and the growth of the Internet, demand has soared for global pipelines to carry voice, video and data. That has spawned start-ups such as Global Crossing that have challenged the consortia with lower prices. The launching of the inquiry is a coup for Global Crossing's Washington lobbyists, including Greg Simon, a former aide to Vice President Al Gore, and Anne Bingaman, former head of the Justice Department's antitrust division. Global Crossing went to the department months ago to complain about the consortium's practices and also has presented its case on Capitol Hill and at the White House, the U.S. Trade Representative's Office and the State and Commerce departments. But the government inquiries also could damage Global Crossing's ties to those consortium members that are customers of its trans-Atlantic cable and are potential customers on the trans-Pacific and other cables being planned by the company. In January, the company petitioned the FCC to delay licensing the consortium until it had scrutinized the consortium's practices, which Global Crossing described as "collusive." The company prepared studies intended to show how the consortium could coerce rivals into joining its cable project, arguing that the consortium's three big Japanese members would control the telecom traffic within the country. The consortium said its pricing on the trans-Pacific cable is lower than Global Crossing's, and it has told the FCC that it will take steps to ensure that no carriers will have difficulty carrying their traffic within Japan at competitive prices. The Justice Department probe is likely to take months and could end without any charges. The FCC is unlikely to open its inquiry for at least a few weeks.