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To: Maven who wrote (2850)	7/11/1998 4:47:00 PM
From: Anthony Wong	Respond to of 11568

Excellent piece! GTE is conducting a dust-in-your-eyes public-relations campaign to persuade antitrust regulators that the merger would be "monopolistic." The main charge is that the merger would "monopolize" the Internet by leaving the new company with some 60% of all Internet service-provider connections that pass over lines or through computers owned by MCI/WorldCom. GTE's lawsuit argues that the merger would "destroy the critical competitive balance that exists on the Internet today." The problem with this type of analysis is that it is static, whereas real-world competition is a dynamic process. Even if MCI/WorldCom would have 60% of all service connections upon consummation of the merger, that would not give it the power to charge monopolistic prices. The new company would still face fierce competition from AT&T and Sprint; from Qwest and IXC, which are currently constructing fiber-optic transmission lines; and from at least four other companies that have announced plans to construct additional lines. On April 20, AT&T announced it would invest more than $300 million this year alone to expand its Internet "backbone capacity." Even more companies will enter the business if there is a profit to be made. The fact that MCI and WorldCom combined currently have about 60% of the Internet connections market is a testament to the quality of products and service these companies have provided in the past, not to any monopoly power. Yhe merged company can recover through other busines opportunities any business lost through the sale of MCIC's inernet and intranet assets.