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To: Carter Patterson who wrote (2486)	5/26/1998 12:30:00 PM
From: Anthony Wong	Read Replies (1) \| Respond to of 11568

EU, U.S. Regulators Cooperate on WorldCom-MCI Review (Update1) Bloomberg News May 26, 1998, 7:27 a.m. PT EU, U.S. Regulators Cooperate on WorldCom-MCI Review (Update1) (Adds comment from WorldCom, MCI starting in 4th paragraph.) Brussels, May 26 (Bloomberg) -- European and U.S. antitrust regulators are working closely to come up with conditions needed to prevent WorldCom Inc. from dominating global Internet traffic after its planned $41.8 billion takeover of MCI Communications Corp., EU Competition Commissioner Karel Van Miert said. ''We're both trying to ensure that the companies don't dominate the Internet backbone,'' Van Miert told a European Parliament committee. The U.S. and EU regulators are ''trying to get the same concessions to ensure that competition concerns are met consistently on both sides of the Atlantic,'' he said. Van Miert said last week he believes WorldCom and MCI are ''prepared'' to slim down their Internet activities. MCI is soliciting offers to sell its wholesale Internet business, which carries other companies' Internet traffic, in a bid to win EU and U.S. regulatory approval, a person familiar with the sale said last week. WorldCom spokeswoman Terri Howell said WorldCom chief executive Bernard Ebbers told shareholders at the company's annual meeting Thursday that, given the size of the MCI acquisition, divesting some assets to appease regulators would be a ''small remedy.'' He also said the companies have not yet been officially asked to do anything, Howell said. She declined further comment, citing the confidentiality of the review process. MCI spokesman Jim Monroe said that ''while discussions with the EC continue, it would be inappropriate to comment.'' The deadline for the companies to offer concessions is June 15, and the final deadline for an EU ruling on the acquisition is mid-July. The companies said they expect the transaction to be completed this summer. Market researcher Gartner Group estimated that the combined MCI-WorldCom would carry more than 50 percent of Internet traffic. The companies disagree, saying they account for 21 percent of worldwide revenue for Internet access. Stefan Rating, Van Miert's spokesman, said today that EU regulators are calculating the combined companies' market share based on the volume of traffic flowing through Internet networks, and have rejected the companies' argument that revenue should be the measure of market share. Describing cooperation between EU and U.S. antitrust regulators on WorldCom-MCI and in other cases as ''exemplary,'' Van Miert said he'll sign an agreement next week in Washington aimed at stepping up that cooperation. Under the ''positive comity'' agreement, European regulators will let their U.S. counterparts take the lead in reviewing mergers and acquisitions with primary impact on the U.S. market, even if they also affect EU markets, and vice- versa. --Alison Jahncke in Brussels (32-2) 285-4300, with reporting by news.com