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September 14, 1998

Separate Statement of Commissioner Gloria Tristani, Dissenting in Part

Re: Application of WorldCom, Inc. and MCI Communications Corporation for Transfer of Control of MCI Communication Corporation to WorldCom, Inc., CC Docket No. 97-211.

I write separately and dissent in part from the majority's decision not to impose some type of reporting requirement to monitor the merged company's progress in the local residential market.

The Commission's framework for evaluating mergers is simply that a merger should be approved if its positive effects outweigh its negative effects. One significant negative consequence that was alleged was that the merged company would abandon the possibility of competing for residential customers in the local market. The Order ultimately does not weigh this possibility against that application, in large part because of a commitment by WorldCom and MCI to compete in the local residential market. I place great importance not only on the ability of the merged company to compete, but the likelihood of that it will do so.

After expressing its reliance on the commitment by WorldCom and MCI, the majority notes that it will monitor the merged company's progress in the local residential market. I applaud and fully support their willingness to monitor the company's actions following the merger. However, I respectfully disagree with their decision not to impose some type of reporting requirement on the merged company that would facilitate such monitoring. A minimal reporting requirement seems to me an eminently reasonable way of seeing whether the company follows through on its commitment to compete for residential customers for local service. If the company intends to keep its commitment, what's the harm in keeping us apprised of its progress?

While I recognize, as the majority does, that the Commission has gathered some information about the status of competition in the telecommunications markets, the process is not regularized or particularly useful in providing information about the progress of local competition generally or local residential competition in particular. My preoccupation with getting these facts is based on this Commission's obligation to gauge the progress of competition as we implement the Communications Act's pro-competitive provisions.

It is my hope that at some future date, the Commission will create a meaningful mechanism for measuring the progress of local competition that would obviate the need for a reporting requirement here. At this point, however, I am unwilling to rely on a future mechanism for gathering such information when such mechanism's very existence and suitability for the purposes at hand are uncertain. Additionally, it cannot be reasonably argued that a reporting requirement consisting of a one-page letter every six months is overly burdensome. It is also worth noting that at least two state commissions (Missouri and Georgia) require all local carriers to report regularly on the number of residential lines they serve simply as a condition of providing service in those states. Thus I would think it quite sensible for this Commission to direct the merged company to keep us apprised of its compliance with a commitment that, judging from paragraphs 192-193, was clearly critical to our approval of this merger.

I would underscore my expectation that WorldCom-MCI live up to its commitment to compete for local residential customers, the vast majority of whom continue to have exactly one choice for local telephone service today. And I take this opportunity to make clear that I will take a great interest in seeing that the company adhere to this commitment.

Finally, I take this opportunity to address one issue in Commissioner Powell's separate statement accompanying this Order. I do not share his hesitation to explore, in the context of a merger, allegations that one or both of the applicants has declined to serve customers on the basis of the customers' race. Such allegations were made in this proceeding against the applicants. My colleagues and I ultimately determined that those claims were not actionable because: (1) the applicants sufficiently explained how their networks came to be laid out in this fashion; and (2) the parties seeking to halt the merger on these grounds provided no other evidence of the merged company's intent to discriminate on the basis of race. Nonetheless, I would underscore that I will always be concerned with allegations of racial discrimination in determining whether proposed telecommunications mergers serve the public interest.

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