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FOR IMMEDIATE RELEASE
November 4, 1999
CONTACT: Michelle Tober
(202) 326-7370

MCI WorldCom-Sprint Merger Should Lead to
Bell Entry Into Long Distance Market;
FCC Should Not Have Authority to Review Mergers

Background: Today, the Senate Judiciary Committee held a hearing on the proposed MCI WorldCom-Sprint merger. The following statement may be attributed to Roy Neel, president and CEO of the United States Telecom Association (USTA).

WASHINGTON, DC -- "The proposed merger of MCI WorldCom and Sprint demands careful scrutiny from federal regulators to ensure that the combined company does not exert undue power over consumers.

"The elimination of one of the top three long distance competitors highlights the need to open the long distance voice and data markets to the Bell companies. The Telecommunications Act of 1996 gives the Federal Communications Commission (FCC) wide latitude to approve long distance applications. Since the Act was passed, the Bell Companies have spent billions of dollars to provide competitors with access to their networks and have made great strides towards meeting the requirements of Section 271 of the Act. Facilities-based competitive local exchange carriers have deployed 724 switches in 320 cities as of March 1999. Today there is more competition in the local market than there was three and a half years after the long distance market was opened to competition.

"The FCC should act quickly to approve Bell Atlantic's application to provide long distance in New York, and provide a clear roadmap for other companies. This will alleviate concerns about undue concentration in the long distance market by giving new players such as Bell Atlantic a chance to compete."

"Further, it is time to get the FCC out of the merger review process. The FCC is now using merger reviews as a policy making vehicle. As I explained in my testimony (PDF)** yesterday before the House Judiciary Committee, the Telecom Act stripped away merger review authority from the Commission except for the narrow review of radio license transfers.

"The Justice Department retains legal authority to comprehensively review telecommunications industry mergers -- not the FCC. At a minimum, the FCC merger review process should be statutorily shortened or even eliminated altogether, except for spectrum management issues, as review by the FCC has become duplicative of reviews by the DOJ. And, Congress should specify the time frame within which the FCC must act. These merging companies need certainty and prompt action in an era where technological advances are measured in days, weeks and months, not years."

For more than one hundred years, the USTA has been representing the interests of the small, mid-sized and large companies of the nation's local exchange carrier industry. The Association represents more than 1,200 companies worldwide that provide local exchange, long-distance, wireless, Internet and video services.

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