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Technology Stocks : WCOM -- Ignore unavailable to you. Want to Upgrade?

To: dougjn who wrote (2503)	5/28/1998 3:02:00 PM
From: Anthony Wong	Read Replies (2) \| Respond to of 11568

FOCUS-WorldCom, MCI move to allay antitrust fears Thursday May 28, 2:09 pm Eastern Time By Amelia Torres BRUSSELS, May 28 (Reuters) - U.S. telecommunication giants WorldCom Inc (WCOM - news) and MCI Communications Corp (MCIC - news) on Thursday moved to allay antitrust concerns on both sides of the Atlantic that their merger would dominate the Internet market. The announcement that MCI was selling its Internet business to Cable & Wireless (quote from Yahoo! UK & Ireland: CW.L) of Britain came only a day after the European Commission rejected a German pay-television alliance, confirming it could stand up to corporate deals it judges anti-competitive. Although the U.S. Justice Department is also investigating the $37 billion merger between WorldCom and MCI, the European Union executive is much more advanced in its own review and must come to a final verdict by mid July. European Competition Commissioner Karel Van Miert has been outspoken and at times emotional in leading the fight. Only last week he reacted angrily to suggestions by WorldCom's Chief Executive Bernie Ebbers that the EU had ''miscalculated'' the two companies' combined share of Internet backbone -- the main trunk of the Internet in and out of Europe. Quick as a flash, Van Miert retorted this was not true and said any overlap between WorldCom and MCI in the Internet backbone market ''should be eliminated without any doubt.'' This was the first official indication that the EU would not content itself with cosmetic concessions and meant that either WorldCom's UUNet subsidiary or MCI's own Internet businesses would have to go. Van Miert said on Tuesday that his services were co-operating closely with the U.S. Justice Department and that both authorities hoped to win similar concessions from the two telecoms firms. He will be in Washington on June 3-7 to sign a new version of a 1991 bilateral cooperation agreement which will step up the fight against international cartels and abuse of dominant positions by multinational companies. The Commission is the clearing house for mergers and acquisitions affecting the 15-nation European Union irrespective of whether or not the firms involved are European. It began a full-scale probe into the WorldCom/MCI deal in March. U.S. rival GTE Corp (GTE - news) has claimed that the new entity would control up to 60 percent of the critical Net backbone which transports data among hundreds of Internet service providers. The Commission has not given its own estimate, but EU regulators seem to be particularly anxious about control of Internet interconnection points, creating the danger that the merged firm could squeeze out smaller firms by raising prices. Thursday's WorldCom/MCI announcement came sooner than expected by the Commission and several antitrust lawyers who have been following the case. Often, as occurred with the failed German deal between Bertelsmann, Kirch and Deutsche Telekom, negotiations run right up to the deadline, involving Van Miert's team in frantic, last-minute consultations with companies and antitrust experts. Commission spokesman Stefan Rating, caught off guard, reacted cautiously to the sale of MCI's Internet interests at the EU executive's daily news briefing. ''This might help their case in that the Commission stated quite clearly that there couldn't be any overlap if they want the deal to be approved,'' he said. GTE said on Thursday that MCI's Internet sale did not solve the problems. The companies have apparently opted to sacrifice the Internet businesses of MCI which are much smaller than UUNet. But a Commission source told Reuters that the sale would have to be scrutinised to make sure it addressed its concerns. The source said that a sale of UUNet would have made this easier because it is a ''stand-alone'' business, but it was difficult to say at first sight whether the MCI divestment would have the same result. He noted MCI's Internet businesses were integrated with its telecommunications activities, meaning a sale may require some biz.yahoo.com