WPC. 2B+Ju Zw|xCourier New (TT)Symbol (TT)Arial (TT)d6X@DQ@a\  P[APJ2PQP2?Bphoenix#Xx6X@DQX@# petition to dismiss, II DSILVERMWiley, Rein & Fielding  2 ..M.{. heading 1heading 1X` hp x (# (#  (#X` hp x (#heading 2heading 2X` hp x (#` (# ` (#X` hp x (#heading 3heading 3X` hp x (#` (# ` (#X` hp x (#heading 4,h4heading 4,h4X` hp x (#  (#   (#X` hp x (#2q. .7eheading 5heading 5X` hp x (#h (# h (#X` hp x (#heading 6heading 6X` hp x (#h (# h (#X` hp x (#heading 7heading 7 heading 8heading 8 2s  ls v Uheading 9heading 9 A7#B2PQP#  #Xx6X@DQX@#Default Paragraph FoDefault Paragraph Font Body TextBody Text  headerheader X` hp x (#(#(#X` hp x (#2! vv9rfootnote textfootnote text  footerfooterX` hp x (#(#(#X` hp x (#Body LeftBody Left endnote referenceendnote reference 2vSrl;vendnote textendnote text footnote referencefootnote reference page numberpage number Quote IndentQuote Indent 2#O.m!toc 7toc 7X` hp x (#` (#`` (#`X` hp x (#toc 1toc 1  X` hp x (#(#`(#`X` hp x (#toc 2toc 2X` hp x (#4` (#`4` (#`X` hp x (#toc 3toc 3X` hp x (#4` (#`4` (#`X` hp x (#2, $'&E(c*toc 4toc 4X` hp x (#4 (#`4 (#`X` hp x (#toc 5toc 5X` hp x (#4h(#`4h(#`X` hp x (#toc 6toc 6X` hp x (#4h(#`4h(#`X` hp x (#toc 8toc 8X` hp x (#( (#`( (#`X` hp x (#2,toc 9toc 9X` hp x (# (#` (#`X` hp x (#1>!2x` xdd footerX` hp x (#(#page number#XX2PQXP##Xx6X@DQX@#"page number">X` hp x (#(# footer(#` hp x (#й#XX2PQXP# Before the  X FEDERAL COMMUNICATIONS COMMISSION Washington, D.C. 20554  In the Matter of) ) Applications of WorldCom, Inc. and) MCI Communications Corporation)CC Docket No. 97211 for Transfer of Control of ) MCI Communications Corporation to) WorldCom, Inc.) To:The Commission  MOTION TO DISMISS OF GTE SERVICE CORPORATION  GTE Service Corporation and its affiliated telecommunications companies#footnote reference#X0X81ÍÍ footnote text#footnote reference#)footnote reference)GTE Alaska, Incorporated, GTE Arkansas Incorporated, GTE California Incorporated, GTE Florida Incorporated, GTE Hawaiian Telephone Company Incorporated, The Micronesian Telecommunications Corporation, GTE Midwest Incorporated, GTE North Incorporated, GTE Northwest Incorporated, GTE South Incorporated, GTE Southwest Incorporated, Contel of Minnesota, Inc., Contel of the South, Inc., GTE Communications Corporation, and GTE Hawaiian Tel International Incorporated.#Xx6X@DQX@# (collectively GTE) herewith submits its motion to dismiss the above captioned applications of WorldCom, Inc. ( WorldCom) and MCI Communications Corporation ( MCI) for transfers of control of MCI to WorldCom.#footnote reference#O footnote text#X>0 181`111X1##footnote reference##X>0 181`111X1##XX2PQXP#э)footnote reference) Pursuant to Public Notice, DA 972494, released November 25, 1997, Petitions/Comments on the WorldCom/MCI Application are due on January 5, 1998. Therefore, this Motion to Dismiss is timely filed. #Xx6X@DQX@#O The WorldCom/MCI applications so egregiously fail to meet the Commissions clearly established information requirements for transfers in the merger context as to warrant their summary dismissal.#footnote reference# footnote text#X>0 181`111X1##footnote reference##X>0 181`111X1#)footnote reference)#XX2PQXP#GTE is filing simultaneously herewith a Petition to Deny the requested transfer and a Request to Inspect Protected Information.#Xx6X@DQX@# Indeed, rather than proffer an open, thoughtful explanation of the largest proposed telecommunications merger in history, as required by guidelines established in the Commissions Bell Atlantic/NYNEX Order,#footnote reference#X81ÍÍX81ÍÍ footnote text#footnote reference#)footnote reference) NYNEX Corp. and Bell Atlantic Corp., Memorandum Opinion and Order, File No. NSDL9610, FCC 97286 at (rel. Aug. 14, 1997) ( Bell Atlantic/NYNEX Order).#Xx6X@DQX@#  WorldCom and MCI present a charade. Their transfer applications not only ignore the mergers numerous potential anticompetitive effects, but they fail to provide the most basic information required by Bell Atlantic/NYNEX to evaluate the public interest and competitive ramifications of this transaction. Its not that these applicants have tried to hide the ball, they just didnt bother to bring the ball to the game. Therefore, the applications of WorldCom and MCI should be summarily dismissed.  I.FCC STANDARDS FOR REVIEWING MERGERS: THE BELL ATLANTIC/NYNEX ORDER Before approving a proposed transfer of control, the Commission is required by Sections 214(a) and 310(d) of the Communications Act to consider the effects of the transfer on competition.#footnote reference#X81ÍÍX81ÍÍ footnote text#footnote reference#)footnote reference) Pittencrieff Communications, Inc. and Nextel Communications, Inc., Memorandum Opinion and Order, CWD No. 9722, DA 972260 at  8 (rel. Oct. 24, 1997). #Xx6X@DQX@# Through a series of recent merger orders, including proceedings in which MCI was a participant, the Commission has made it abundantly clear that its detailed framework for evaluating a mergers public interest and competitive effects requires applicants to provide detailed information regarding, among other things: (1) the definition of product markets; (2) the definition of geographic markets; (3) the identity of significant actual or potential competitors; and (4) a determination of whether there are public interest benefits that enhance competition and therefore outweigh any anticompetitive effects.#footnote reference# footnote text#X>0 181`111X1##footnote reference##X>0 181`111X1##XX2PQXP#э)footnote reference) The Commissions guidelines were forged from its consideration of three significant mergers in 1997. See Pacific Telesis Group and SBC Communications, Inc. Memorandum Opinion and Order, Rpt. No. LB9632, FCC 9728 (rel. Jan. 31, 1997); NYNEX Corp. and Bell Atlantic Corp., Memorandum Opinion and Order, File No. NSDL9610, FCC 97286 at XX (rel. Aug. 14, 1997); MCI Communications Corp. and British Telecommunications PLC, Memorandum Opinion and Order, GN Docket No. 96245, FCC 97302 (rel. Sept. 24, 1997) ( BT/MCI Order). #Xx6X@DQX@# These standards are universal requirements and they apply to all horizontal mergers. As will be shown, however, the WorldCom/MCI applications fail, by any measure, to meet all of these requirements.   A.The Applicants Must Prove that the Merger is in the Public Interest Let there be no mistake, it is the applicants in these proceedings who bear the burden of demonstrating that the proposed transaction is in the public interest.#footnote reference# footnote text#X>0 181`111X1##footnote reference##X>0 181`111X1##XX2PQXP#э)footnote reference) Bell Atlantic/NYNEX Order at  2. #Xx6X@DQX@#ў Indeed, the FCCs public interest standard requires WorldCom and MCI to show that their merger will not substantially . . . lessen competition . . . [or] . . . create a monopoly;#footnote reference# footnote text#X>0 181`111X1##footnote reference##X>0 181`111X1##XX2PQXP#э)footnote reference) Id. at  33 (citing 15 U.S.C. 18.21(a) (1997)). #Xx6X@DQX@#ѱ and that the merger also will enhance competition.#footnote reference#  footnote text#X>0 181`111X1##footnote reference##X>0 181`111X1##XX2PQXP#э)footnote reference) Bell Atlantic/NYNEX Order at  2. #Xx6X@DQX@#ў In addition, WorldCom and MCI must show in their applications that any harms to competition . . . are outweighed by benefits that enhance competition.#footnote reference#}  footnote text#X>0 181`111X1##footnote reference##X>0 181`111X1##XX2PQXP#э)footnote reference) Id. #Xx6X@DQX@#} Therefore, through the presentation of facts, data or other documentation, WorldCom and MCI must demonstrate the benefits, if any, that will flow from the merger. They must then show, by way of fact and not conjecture, that those benefits outweigh any resulting harms, such as enhancing market power, slowing the decline of market power.#footnote reference#}  footnote text#X>0 181`111X1##footnote reference##X>0 181`111X1##XX2PQXP#э)footnote reference) Id. #Xx6X@DQX@#}  B.The Applicants Must Prove that the Merger Will Not Eliminate Potentially Significant Sources of Competition As a means to further the procompetitive policies and goals of the Telecommunications Act of 1996, the Bell Atlantic/NYNEX Order also places on merger applicants the burden of showing that the proposed merger would not eliminate potentially significant sources of competition that the Act sought to create.#footnote reference#  footnote text#X>0 181`111X1##footnote reference##X>0 181`111X1##XX2PQXP#э)footnote reference) Id. at  3; see also BT/MCI Order at  4. #Xx6X@DQX@#ѵ Here, the Commission noted its specific concern about mergers between companies that are potential rivals,#footnote reference#  footnote text#X>0 181`111X1##footnote reference##X>0 181`111X1##XX2PQXP#э)footnote reference) BT/MCI Order at  5. #Xx6X@DQX@#ё such as the instant case, and pledged to scrutinize skeptically any merger that appears likely to remove a firm that might prove a significant competitor in markets that are just opening to competition.#footnote reference# footnote text#X>0 181`111X1##footnote reference##X>0 181`111X1##XX2PQXP#э)footnote reference) Id. at  41. #Xx6X@DQX@#у At its heart, the Bell Atlantic/NYNEX Order requires WorldCom and MCI to include in their applications information sufficient to prove that, on balance, their merger will enhance and promote, rather than eliminate or retard . . . , other sources of competition.#footnote reference# footnote text#X>0 181`111X1##footnote reference##X>0 181`111X1##XX2PQXP#э)footnote reference) Bell Atlantic/NYNEX Order at  3. #Xx6X@DQX@#ў  C.The Applicants Must Establish the Relevant Product Market, Geographic Market, and the Most Significant Market Participants Not only do WorldCom and MCI bear the burden to meet the public interest standard, the FCC also requires the applicants to provide the grist for the mill in the Commissions merger analysis ! that includes, among other things, establishing the relevant [product and geographic] markets.#footnote reference# footnote text#X>0 181`111X1##footnote reference##X>0 181`111X1##XX2PQXP#э)footnote reference) Id. at  49. (citing . . . )#Xx6X@DQX@#ј Furthermore, applicants must identify those companies in each relevant product and geographic market that are the most significant market participants.#footnote reference# footnote text#X>0 181`111X1##footnote reference##X>0 181`111X1##XX2PQXP#э)footnote reference) Id. at  58. #Xx6X@DQX@#щ   I. I. I. I. I. I. I. I. THE WORLDCOM/MCI APPLICATIONS FAIL TO MEET THE STANDARDS SET IN THE BELL ATLANTIC/NYNEX ORDER A.WorldCom and MCI Failed to Show that the Proposed Merger is in the Public Interest WorldComs public interest showing is virtually nonexistent, consisting of a handful of unsupported claims regarding multibillion dollar synergies, efficiencies, and economies that will somehow materialize to enhance competition in local and international services.#footnote reference# footnote text#X>0 181`111X1##footnote reference##X>0 181`111X1##XX2PQXP#э)footnote reference) Id. at ii.#Xx6X@DQX@#т However, despite their grandeur, these claims are floated unsupported by facts or data. The applications guarantee that the two companies will accelerate competition ! especially in local markets ! by creating a company with the capital, marketing abilities, and stateoftheart network to compete against incumbent carriers,#footnote reference# footnote text#X>0 181`111X1##footnote reference##X>0 181`111X1##XX2PQXP#э)footnote reference) Id. at iv. #Xx6X@DQX@#ф but do not reveal how this transformation of the local market will occur or quantify the actual benefit to consumers. And where the companies declare that [s]ubstantial synergies are expected to be realized by combining the long distance and local operations of MCI and WorldCom to achieve better utilization of the combined network and operational savings8,#footnote reference# footnote text#X>0 181`111X1##footnote reference##X>0 181`111X1##XX2PQXP#э)footnote reference) Id. at  36. #Xx6X@DQX@#щ there is no quantitative determination of how those benefits will be achieved or where they will flow ! to the public, or solely to the applicants.  B.WorldCom and MCI Failed to Prove that the Proposed Merger Will Not Eliminate Potential Significant Sources of Competition  WorldComs entire discussion of the anticompetitive effects of the merger consists, almost verbatim, of the following claims:  I. I. I. I. I. I. I. I.X` hp x (#4` hp x (# [N]either WorldCom nor MCI is a dominant carrier.#footnote reference# footnote text#X>0 181`111X1##footnote reference##X>0 181`111X1##XX2PQXP#э)footnote reference) WorldCom Application at 38. #Xx6X@DQX@#я 4` hp x (#` hp x (# ` hp x (#4` hp x (# [T]he revenue shares of WorldCom and MCI are minimal in the sector on which capital investment and expansion programs primarily focus: local services (both domestic and international).#footnote reference#| footnote text#X>0 181`111X1##footnote reference##X>0 181`111X1##XX2PQXP#э)footnote reference) Id. #Xx6X@DQX@#| 4` hp x (#` hp x (# ` hp x (#4` hp x (# [N]either WorldCom nor MCI controls bottleneck facilities.#footnote reference# footnote text#X>0 181`111X1##footnote reference##X>0 181`111X1##XX2PQXP#э)footnote reference) Id. at 39. #Xx6X@DQX@#ф 4` hp x (#` hp x (#‘ ` hp x (#4` hp x (# Nor is the proposed Merger likely to have any significant adverse impact on the Commissions ability to enforce regulatory oversight responsibilities, given WorldCom and MCIs lack of market power and foreign affiliation.#footnote reference# footnote text#X>0 181`111X1##footnote reference##X>0 181`111X1##XX2PQXP#э)footnote reference) Id. at 3940. #Xx6X@DQX@#ч 4` hp x (#` hp x (# ` hp x (#4` hp x (# The Merger is . . . unlikely to increase the likelihood of coordinated action among other industry players because the long distance industry, rather than being highly concentrated, epitomizes the competitive marketplace.#footnote reference# footnote text#X>0 181`111X1##footnote reference##X>0 181`111X1##XX2PQXP#э)footnote reference) Id. at 40. #Xx6X@DQX@#ф 4` hp x (#` hp x (# ` hp x (#4` hp x (# [N]o precluded competitor who has previously been deterred or prevented by regulatory barriers from entering the market is being removed from the market by the Merger at a time when barriers that previously had precluded its entry are being removed.#footnote reference#| footnote text#X>0 181`111X1##footnote reference##X>0 181`111X1##XX2PQXP#э)footnote reference) Id. #Xx6X@DQX@#| 4` hp x (#` hp x (# This extraordinary exercise in brevity attempts to condense the competitive effects of a $40 billion merger, involving a variety of product lines in markets stretching from the local loop around the globe, into a mere two paragraphs. In explanation, WorldCom and MCI boldly assert that there are no specific anticompetitive concerns, such as enhancement of a partys existing market power to be overcome, and, that [m]ost of the activities of WorldCom and MCI are complementary rather than directly competitive.#footnote reference# footnote text#X>0 181`111X1##footnote reference##X>0 181`111X1##XX2PQXP#э)footnote reference) Id. at 38, 27. #Xx6X@DQX@#ш Notably absent from these calm assurances, however, are data concerning the respective telecommunications interests of the two companies, their market shares, their facilities or the extent of their competitive overlaps. Indeed, there are no studies, data, or other information offered to corroborate any of the claims. There is no basis to support the contentions made by the applicants regarding their mergers anticompetitive effects, therefore, their applications should be summarily dismissed.  C.WorldCom and MCI Failed to Establish the Relevant Product Market, Geographic Market, and the Most Significant Market Participants  Similarly, nowhere in the application have WorldCom and MCI included an analysis of the relevant product markets, the relevant geographic markets, or the most significant market participants to be affected by this merger. The burden to produce this information is applicants. Their failure to do so warrants the dismissal of their applications.  III.CONCLUSION WHEREFORE, GTE SERVICE CORPORATION and its affiliated telecommunications companies hereby respectfully request the Commission to dismiss the applications of WorldCom, Inc. and MCI Communications Corporation for transfer of Control of MCI Communications Corporation.   Body TextRespectfully submitted, GTE SERVICE CORPORATION  By:______________________ William P. Barr, Executive ViceRichard E. Wiley  President & General CounselR. Michael Senkowski   Body Text andJeffrey S. Linder Ward W. Wueste, Vice President Peter D. Shields  Deputy General Counsel GTE SERVICE CORPORATIONWILEY, REIN & FIELDING One Stamford Forum1776 K Street, N.W. Stamford, CT 06904Washington, D.C. 20006 (202) 4297000 January 5, 1998 #;2PQP#558269    X  Body Text#XX2PQXP#CERTIFICATE OF SERVICE  X I hereby certify that on this 5th day of January, 1998, I caused copies of the foregoing Motion to Dismiss to be delivered by first class U.S. mail to the following: Michael H. Salsbury Mary L. Brown Larry A. Blosser MCI COMMUNICATIONS CORPORATION 1801 Pennsylvania Avenue, N.W. Washington, D.C. 200063606 Andrew D. Lipman Jean L. Kiddoo SWIDLER & BERLIN, CHTD. 3000 K Street, N.W., Suite 300 Washington, D.C. 20007 Catherine R. Sloan Robert S. Koppel WORLDCOM, INC. 1120 Connecticut Avenue, N.W. Washington, D.C. 20036 *Chief, Network Services Division Federal Communications Commission 2000 M St., N.W., Room 235 Washington, D.C. 20554 (2 copies) *International Reference Room International Bureau Federal Communications Commission 2000 M St., N.W., Room 102 Washington, D.C. 20554 (2 copies) *Wireless Reference Room Wireless Telecommunications Bureau Federal Communications Commission 2025 M St., N.W., Room 5608 Washington, D.C. 20554 (2 copies)   Body Text ‘  Body Text *John Nakahata Federal Communications Commission 1919 M Street, N.W., Room 814 Washington, D.C. 20554 *Chairman William F. Kennard Federal Communications Commission 1919 M Street, N.W., Room 814 Washington, D.C. 20554 *Regina Keeney Federal Communications Commission 2000 M Street, N.W., 8th Floor Washington, D.C. 20554 *Commissioner Harold FurchtgottRoth Federal Communications Commission 1919 M Street, N.W., Room 802 Washington, D.C. 20554 *Paul Misener Federal Communications Commission 1919 M Street, N.W., Room 802 Washington, D.C. 20554 *Jane Mago Federal Communications Commission 1919 M Street, N.W., Room 844 Washington, D.C. 20554 *Helgi Walker Federal Communications Commission 1919 M Street, N.W., Room 802 Washington, D.C. 20554 *James Casserly Federal Communications Commission 1919 M Street, N.W., Room 832 Washington, D.C. 20554 *Commissioner Gloria Tristani Federal Communications Commission 1919 M Street, N.W., Room 826 Washington, D.C. 20554 ‘*Rick Chessen Federal Communications Commission 1919 M Street, N.W., Room 826 Washington, D.C. 20554 *Richard Metzger Federal Communications Commission 1919 M Street, N.W., Room 500 Washington, D.C. 20554 *Karen Gulick Federal Communications Commission 1919 M Street, N.W., Room 826 Washington, D.C. 20554 *Paul Gallant Federal Communications Commission 1919 M Street, N.W., Room 826 Washington, D.C. 20554 *Susan Fox Federal Communications Commission 1919 M Street, N.W., Room 814 Washington, D.C. 20554 *Ari Fitzgerald Federal Communications Commission 1919 M Street, N.W., Room 814 Washington, D.C. 20554 *Commissioner Michael Powell Federal Communications Commission 1919 M Street, N.W., Room 844 Washington, D.C. 20554 *Peter E. Tenhula Federal Communications Commission 1919 M Street, N.W., Room 844 Washington, D.C. 20554 *Kyle D. Dixon Federal Communications Commission 1919 M Street, N.W., Room 844 Washington, D.C. 20554 ‘*Commissioner Susan Ness Federal Communications Commission 1919 M Street, N.W., Room 814 Washington, D.C. 20554 *James L. Casserly Federal Communications Commission 1919 M Street, N.W., Room 814 Washington, D.C. 20554 *John Muleta Federal Communications Commission 1919 M Street, N.W., Room 500 Washington, D.C. 20554 *Richard Welch Federal Communications Commission 1919 M Street, N.W., Room 500 Washington, D.C. 20554 *Larry Strickling Federal Communications Commission 1919 M Street, N.W., Room 650L Washington, D.C. 20554 *Christopher Wright Federal Communications Commission 1919 M Street, N.W., Room 614 Washington, D.C. 20554 *Daniel Phythyon Federal Communications Commission 1919 M Street, N.W., Room Washington, D.C. 20554 *Ruth Milkman Federal Communications Commission 1919 M Street, N.W., Room 500 Washington, D.C. 20554 *Diane Cornell Federal Communications Commission 2000 M Street, N.W., 8th Floor Washington, D.C. 20554 ‘*David Solomon Federal Communications Commission 1919 M Street, N.W., Room 614 Washington, D.C. 20554 *Paula Michele Ellison Federal Communications Commission 1919 M Street, N.W., Room 614 Washington, D.C. 20554 *Kevin Martin Federal Communications Commission 1919 M Street, N.W., Room 802 Washington, D.C. 20554  Body Text *Gregory Cooke Federal Communications Commission 2000 M Street, N.W., Room 210R Washington, D.C. 20554 *Carol Mattey Federal Communications Commission 1919 M Street, N.W., Room 544 Washington, D.C. 20554 *Rebecca Dorch Federal Communications Commission 1919 M Street, N.W., Room 658 Washington, D.C. 20554 *International Transcription Service, Inc. 1231 20th Street, N.W. Washington, D.C. 20036  ` hp x (#p x (# ¬Robin B. Walker p x (#F` hp x (# * via hand delivery   Body Text F` hp x (#` hp x (#