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MCI WorldCom's Sprint Toward Monopoly: An Analysis of the Proposed Telecommunications Merger
MCI WorldCom's Sprint Toward Monopoly: An Analysis of the Proposed Telecommunications Merger
By: Stephen Pociask and Jack Rutner


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study, 48 pages, 6" x 9" (paper), 2000
ISBN:944826881
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Mergers in the telecommunications sector have become almost commonplace as new rivals position themselves against existing long-distance and local phone companies. Although many such mergers can be beneficial, they can also hurt consumers. The proposed merger of MCI WorldCom and Sprint, two of the largest providers of long-distance and Internet services in the world, raises serious concerns in that regard, because it threatens to slow, if not completely halt, competition in these important, burgeoning industries. MCI WorldCom's Sprint Toward Monopoly, in scrutinizing the hard evidence of revenues and market shares, shows that the merger will intensify concentration to an unacceptable level, posing risks to consumers that the market will be unable to mitigate. Divestiture of a portion of the merging company's network should be the minimum requirement for approving the merger, although the best possible course for policy makers is to reject the merger and to do their utmost to remove as quickly as possible barriers to entry in the wholesale Internet and long-distance markets.

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