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To: JohnG who wrote (339)	7/6/2000 7:18:33 PM
From: JohnG	Respond to of 197469

30 SEnators send FCC Chairman letter opposing Deutsch Telecom's acquisition of Sprint. JohnG WorldCom and Sprint seek guidelines as deal unwinds By Jessica Hall, Reuters 06 July 2000 Long-distance telephone companies WorldCom Inc. and Sprint Corp. will likely abandon their $120 billion merger agreement next week once they clarify how federal regulators' objections to the deal would affect any future mergers, sources familiar with the situation said. The Justice Department, in its largest merger challenge ever, last week sued to block the deal, saying the combination of the No. 2 and No. 3 U.S. long-distance telephone companies would hobble competition in the Internet and long-distance telephone markets. The DOJ filed a 65-page lawsuit mapping out its objections to the deal. The companies have been in talks with regulators to better understand the agency's arguments and to learn whether the objections set standards that would prevent other telecom mergers or alliances in the future, sources said. "From a public policy perspective, the Department of Justice - while it appears decisive - really instituted a lot of gray areas for a lot of companies about what's going to be allowed next," said one source who declined to be named. The companies want the DOJ to clarify the conditions the government might consider for future telecommunications deals, sources said. Could a Baby Bell, for example, ever merge with WorldCom or Sprint? Would two long-distance carriers be allowed to merge once more Baby Bells enter the long-distance market? "The last thing you want to do is go through this again. That means really taking a step back and getting clear on what the rules really mean," the source said. WorldCom and Sprint declined to comment. The Department of Justice could not be immediately reached for comment. While the companies were expected to cancel the deal as early as this week, it will likely be several more days before the companies conclude their discussions with regulators and unwind their complex merger agreement, sources said. "It took a long time to create this deal and it's going to take more than a few days to unravel it," a second source said. Once divorced from WorldCom, Sprint would be an attractive takeover target for Deutsche Telekom AG or one-time suitor BellSouth Corp. , analysts said. Media reports have suggested that Deutsche Telekom AG and Sprint already have held preliminary merger talks, but industry sources told Reuters that such reports were overblown. The German company has merely expressed its interest in Sprint, sources said. Under the merger pact with WorldCom, Sprint can't talk to any interested party before the merger agreement is officially nullified. Sprint would have to pay WorldCom a $2.5 billion break-up fee if it violated that so-called "no shop" agreement. An actual bid for Sprint remains unclear since Deutsche Telekom would face intense regulatory scrutiny. A group of 30 U.S. senators sent a letter to Federal Communications Commission Chairman William Kennard last week saying they opposed Deutsche Telekom acquiring Sprint or another U.S. telecom operator. Deutsche Telekom, which has a warchest of more than 100 billion Euros, is also rumoured to be interested in Qwest Communications International Inc. and Britain's Cable & Wireless Plc. However, sources said the German company will proceed cautiously with any potential bid since it has been burned by failed attempts in the past, such as its unsuccessful takeover of Telecom Italia SpA . Deutsche Telekom is also unlikely to make any major moves until mid-July, when the "quiet period" following its recent share offering expires, a source familiar with the situation said. Qwest on Wednesday remained coy about any potential deal with Deustche Telekom. "This industry will continue to consolidate. Whether we're in somebody's plans or not, I just can't comment," Qwest Chairman Joe Nacchio told cable television network CNBC. "I think we're in a great position where we could go either way (either being a target or an acquirer)," Nacchio said. Deutsche Telekom ended merger talks with Qwest earlier this year after Qwest's existing merger partner, U S West Inc., objected. BellSouth, meanwhile, will remain on the sidelines until it sees whether deep-pocketed Deutsche Telekom will pursue Sprint or Qwest, sources familiar with the situation said. "BellSouth is waiting to see what Deutsche Telekom does - they are the 500-pound gorilla and it's not worth getting into a bidding war with them," one source said. A potential purchase of Sprint by BellSouth has its drawbacks. BellSouth would likely be forced to divest its wireless telephone properties if it bought Sprint, and Sprint's national wireless network, sources said. Qwest also is less attractive to BellSouth because of Qwest's recent acquisition of U S West Inc., sources said. BellSouth owns a minority stake in Qwest. © 1999 Reuters Limited. All rights reserved. Related News Stories Rumorwatch: Deutsche Telekom to buy C&W EU says global merger rules must be better aligned Deutsche Telekom hit by Senate concern EC would probe a Telekom bid for Sprint WorldCom aims to rent wireless spectrum AT&T and WorldCom ponder consumer long distance futures Bandwidth prices still falling, say Concert execs EC kills WorldCom's merger dream Business-to-Business in EC regulator's sights Related Features Fired-up 3G backers set to force WRC spectrum clash Market Strategies: Bandwidth prices set to tumble as BT exploits Asian fiber frenzy Bell Atlantic ruling opens door to long distance Profile: C&W's man for all continents Profile: Global Bob's world ambitions The Business: Business in Brief Bottom Line: Marry in haste and repent at leisure? Access - it's all the rage France Telecom readies bid for Global One

To: JohnG who wrote (339)	7/6/2000 7:18:48 PM
From: JohnG	Respond to of 197469

30 SEnators send FCC Chairman letter opposing Deutsch Telecom's acquisition of Sprint. JohnG totaltele.com WorldCom and Sprint seek guidelines as deal unwinds By Jessica Hall, Reuters 06 July 2000 Long-distance telephone companies WorldCom Inc. and Sprint Corp. will likely abandon their $120 billion merger agreement next week once they clarify how federal regulators' objections to the deal would affect any future mergers, sources familiar with the situation said. The Justice Department, in its largest merger challenge ever, last week sued to block the deal, saying the combination of the No. 2 and No. 3 U.S. long-distance telephone companies would hobble competition in the Internet and long-distance telephone markets. The DOJ filed a 65-page lawsuit mapping out its objections to the deal. The companies have been in talks with regulators to better understand the agency's arguments and to learn whether the objections set standards that would prevent other telecom mergers or alliances in the future, sources said. "From a public policy perspective, the Department of Justice - while it appears decisive - really instituted a lot of gray areas for a lot of companies about what's going to be allowed next," said one source who declined to be named. The companies want the DOJ to clarify the conditions the government might consider for future telecommunications deals, sources said. Could a Baby Bell, for example, ever merge with WorldCom or Sprint? Would two long-distance carriers be allowed to merge once more Baby Bells enter the long-distance market? "The last thing you want to do is go through this again. That means really taking a step back and getting clear on what the rules really mean," the source said. WorldCom and Sprint declined to comment. The Department of Justice could not be immediately reached for comment. While the companies were expected to cancel the deal as early as this week, it will likely be several more days before the companies conclude their discussions with regulators and unwind their complex merger agreement, sources said. "It took a long time to create this deal and it's going to take more than a few days to unravel it," a second source said. Once divorced from WorldCom, Sprint would be an attractive takeover target for Deutsche Telekom AG or one-time suitor BellSouth Corp. , analysts said. Media reports have suggested that Deutsche Telekom AG and Sprint already have held preliminary merger talks, but industry sources told Reuters that such reports were overblown. The German company has merely expressed its interest in Sprint, sources said. Under the merger pact with WorldCom, Sprint can't talk to any interested party before the merger agreement is officially nullified. Sprint would have to pay WorldCom a $2.5 billion break-up fee if it violated that so-called "no shop" agreement. An actual bid for Sprint remains unclear since Deutsche Telekom would face intense regulatory scrutiny. A group of 30 U.S. senators sent a letter to Federal Communications Commission Chairman William Kennard last week saying they opposed Deutsche Telekom acquiring Sprint or another U.S. telecom operator. Deutsche Telekom, which has a warchest of more than 100 billion Euros, is also rumoured to be interested in Qwest Communications International Inc. and Britain's Cable & Wireless Plc. However, sources said the German company will proceed cautiously with any potential bid since it has been burned by failed attempts in the past, such as its unsuccessful takeover of Telecom Italia SpA . Deutsche Telekom is also unlikely to make any major moves until mid-July, when the "quiet period" following its recent share offering expires, a source familiar with the situation said. Qwest on Wednesday remained coy about any potential deal with Deustche Telekom. "This industry will continue to consolidate. Whether we're in somebody's plans or not, I just can't comment," Qwest Chairman Joe Nacchio told cable television network CNBC. "I think we're in a great position where we could go either way (either being a target or an acquirer)," Nacchio said. Deutsche Telekom ended merger talks with Qwest earlier this year after Qwest's existing merger partner, U S West Inc., objected. BellSouth, meanwhile, will remain on the sidelines until it sees whether deep-pocketed Deutsche Telekom will pursue Sprint or Qwest, sources familiar with the situation said. "BellSouth is waiting to see what Deutsche Telekom does - they are the 500-pound gorilla and it's not worth getting into a bidding war with them," one source said. A potential purchase of Sprint by BellSouth has its drawbacks. BellSouth would likely be forced to divest its wireless telephone properties if it bought Sprint, and Sprint's national wireless network, sources said. Qwest also is less attractive to BellSouth because of Qwest's recent acquisition of U S West Inc., sources said. BellSouth owns a minority stake in Qwest. © 1999 Reuters Limited. All rights reserved. Related News Stories Rumorwatch: Deutsche Telekom to buy C&W EU says global merger rules must be better aligned Deutsche Telekom hit by Senate concern EC would probe a Telekom bid for Sprint WorldCom aims to rent wireless spectrum AT&T and WorldCom ponder consumer long distance futures Bandwidth prices still falling, say Concert execs EC kills WorldCom's merger dream Business-to-Business in EC regulator's sights Related Features Fired-up 3G backers set to force WRC spectrum clash Market Strategies: Bandwidth prices set to tumble as BT exploits Asian fiber frenzy Bell Atlantic ruling opens door to long distance Profile: C&W's man for all continents Profile: Global Bob's world ambitions The Business: Business in Brief Bottom Line: Marry in haste and repent at leisure? Access - it's all the rage France Telecom readies bid for Global One