News Release

MCI-Sprint Merger


Director of the Consumer Project on Technology, Love said: “The merger is an attempt to avoid competition. Sprint plays an important role in servicing resellers in the long distance market, smaller companies that buy bandwidth from the big three. For twenty years, you’ve had these three major players. Prices have gone down because there has been competition in the long distance market. This merger is good for the shareholders of the long distance industry, but bad for consumers because it will reduce competition.”
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Research economist with the Communication Workers of America, Goldman said: “When the FCC approved the MCI and WorldCom merger last year, Chairman William Kennard stated that the industry was ‘just a merger away from undue concentration.’ This would be that merger. MCI WorldCom proposes to buy up one of its two main competitors in long distance and grab control of 37 percent of the market (based on long distance revenue), just behind AT&T with 43 percent. There would be no other significant competitor in long distance, with all others having no more than 2 percent market share. Such concentration far surpasses the Justice Department’s permitted market concentration levels, and it fails any common sense test for what would be considered healthy competition.”
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Professor at the Institute of Communications Research at the University of Illinois and author of Rich Media, Poor Democracy: Communication Politics in Dubious Times, McChesney said: “This merger is the result of the bankruptcy of U.S. telecommunications policy that claims its allegiance to competition, but through deregulation has opened the floodgates to the greatest wave of corporate concentration in a century. We have a telecommunications system set up to serve Wall Street and corporate America first and foremost — and then the balance of the population in descending order, depending upon their income.”

Co-administrator of the Program on Corporations, Law and Democracy, Zepernick said: “The deeper question is, how did corporations achieve the power and wealth and authority to get that big, and so dominate our culture and our government? Corporations have usurped our sovereign authority to govern ourselves; it is an assault on democracy. Corporations should be subordinate to us, and clearly they’re not.”
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For more information, contact at the Institute for Public Accuracy: Sam Husseini, (202) 347-0020 or David Zupan, (541) 484-9167