OT> Sprint Adds Weight To Anti-SBC/Ameritech Merger Lobby
November 11, 1998
KANSAS CITY, MISSOURI, U.S.A., : The weight of industry opinion appears to be coming down onthe side of the "no's " as regards the proposed SBC/Ameritech merger. Alongside consumer groups, Sprint [NASDAQ:FON] has now added its voice to the "no" campaign.
According to Sprint, it has allied with several consumer groups to petition the Wisconsin Public Service Commission (WPSC) to investigate and review the proposed merger of Ameritech and SBC Communications, calling the merger " an ill- conceived alliance intended to recreate the Bell system monopoly over telecommunications services."
The petitioners, which include Sprint, the Citizens' Utility Board, the Wisconsin Merchants Federation, the American Association of Retired Persons, and the Wisconsin chapter of the National Federation of Independent Businesses each have different missions, but, Sprint officials say, "are unanimous in their concern that the proposed merger will negatively impact Wisconsin consumers and businesses."
Newsbytes understands that the petitioners have called for the WPSC to assert its general supervisory jurisdiction and conduct an investigation and hearings that would provide clear evidence of the merger's impact on competition in Wisconsin local phone service.
According to Sprint, for consumers, the merger would eliminate SBC as a potential choice in local phone service in Wisconsin, and would give the merged company greater ability to keep other competitors out.
The loss of competition, the petitioners argue, would reduce the incentive to lower rates, would stifle new products and services that consumers and businesses want, and likely would result in a reduction in service quality, petitioners told the commission.
"If you don't like paying high prices for call waiting or caller ID today -- too bad. There won't be anyone else offering Wisconsin customers local service at a better price if this merger goes through and eliminates competition," claimed Ellen D'Amato, Sprint's vice president for state external affairs.
According to D'Amato, the SBC/Ameritech merger -- along with the proposed Bell Atlantic/GTE merger -- should be of dire concern to everyone in America because the US could soon be faced with two giant corporations owning more than two thirds of the nation's telephone lines.
"Essentially, Americans would be at the mercy of a Bell East and a Bell West monopoly," she claimed.
According to Sprint, the states of Illinois, Ohio, and Indiana are investigating the merger and will hold hearings on the SBC/Ameritech merger, which would be the largest merger of utility companies in the history of the US.
Sprint says that the Wisconsin petition noted that former Pacific Bell customers faced significant service problems and an increase in rates after that company was bought by SBC.
Service quality complaints, the petition says, have at least doubled since the Pacific Bell purchase, and anti-consumer behavior and abusive marketing practices by SBC have been reported.
According to the petition, given that the Wisconsin commission already has taken action against Ameritech because of service problems, and the record of SBC service problems, "this commission should review the proposed merger to ensure that consumers are protected adequately."
Interestingly, Sprint argues that the merger would also threaten the long distance competition that has benefited consumers and reduced rates for years.
According to the petition, long distance companies almost always must rely on a connection through the local phone company to serve their customers.
In the case of Sprint, the petition notes that the merged company would control the territory where more than 45 percent of Sprint long distance calls begin and end, giving the merged company even more incentive and opportunity to restrict competition in long distance as well as local service.
"These companies claim their enormous size is necessary to compete, and that big companies are more innovative than smaller companies. But the truth is that competition, not size, is what drives innovation and consumer service, " D'Amato said.
"We believe that, faced with the facts, the Wisconsin Public Service Commission will determine that this merger will have many significant adverse effects on Wisconsin consumers and businesses by reducing competition, diversity and consumer choice in local telephone service," she went on to say, adding that the petitioners are calling on the commission to investigate the proposal fully.
Sprint seems to going pro-active on the anti-merger front, Newsbytes notes. As reported last week by Newsbytes, the carrier has allied with AT&T to press the Ohio Public Utilities Commission to take a closer look at the proposed merger of GTE and Bell Atlantic.
Sprint's Web site is at sprint.com
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