1919 - M Street, N.W.
Washington, D.C. 20554
Fax-On-Demand 202 / 418-2830
Internet: http://www.fcc.gov
ftp.fcc.gov
This is an unofficial announcement of Commission action. Release of the full text of a Commission order constitutes official action. See MCI v. FCC. 515 F 2d 385 (D.C. Circ 1974).
PRESS STATEMENT OF FCC CHAIRMAN WILLIAM E. KENNARD
ON MERGER OF WORLDCOM AND MCI
Consumers of telecommunications services should welcome this merger. By combining WorldCom's expertise in building local and national networks with MCI's marketing savvy, the merged firm will be able to offer more services to more business and residential customers more quickly. Of particular value, the merged firm will have increased capacity to compete more effectively for residential phone subscribers by offering what many of them seek: one-stop shopping that combines both local and long-distance telephone service in one transaction. At the same time, both MCI and WorldCom have pledged to me and to the American people -- on-the-record -- that the merged firm will undertake a strong commitment to extend competitive telecommunications facilities to residential areas, including our nation's inner cities. We take commitments made to the FCC very seriously, and we will be watching MCI Worldcom's progress, along with the progress of all providers, as competition develops in these and other telecommunications markets.
In the final analysis, this merger is in the public interest because it will enhance the parties' ability to bring more choice to consumers, particularly in local telephone markets long foreclosed to competition. But, as I have said on several occasions, each and every merger must be judged on its own merits based on the circumstances prevailing in the marketplace at the time. Two years ago, it would have been unthinkable to approve a merger between the second and fourth largest long distance service providers in the U.S. But today, given the large scale rapid entry into long distance that is occurring and will continue over the next few years, the merger does not threaten to create genuine anticompetitive effects.
I must say, however, that our applause for this combination should be restrained -- more like the polite tapping that occurs when a golfer sinks an easy putt than the roar that followed Mark McGwire's and Sammy Sosa's record shattering homeruns. Because once this merger is consummated, the industry will again be poised just a merger away from undue concentration. I daresay that any subsequent merger -- of this or similar magnitude -- between long distance firms in the near future should be judged quite differently than the merger before us today.