New Orleans, LA
The proposed merger of MCI WorldCom and Sprint will create a $129 billion monopoly in the communications industry goliath focused on profitable big business services, while ignoring the needs of residential and small business consumers and unionized workers in the telecommunications industry.
MCI WorldCom has already demonstrated a disregard for the importance of providing telecommunications services to homes and smaller businesses. Sprint has allowed its local telephone operations in 18 states to deteriorate as it diverts resources to finance networks serving corporate clients. These practices pose a particular threat to working families and low-income neighborhoods whose access to affordable communications and advanced telecommunications services could be seriously diminished.
If the MCI WorldCom/Sprint merger proceeds, this acquisition would combine the second and third largest long distance companies in an already highly concentrated market. By reducing competition in the long distance market from the Big Three to the Big Two, the proposed merger would lead to higher rates in long distance service.
The proposed merger of MCI WorldCom and Sprint would also result in the company controlling more than 50 percent of the Internet backbone, creating the potential for higher prices, and discriminatory access policies that could curtail consumers' access and use of this growing and global communications link.
Last year, the U.S. Department of Justice and the European Commission required MCI to divest itself of its Internet business as a condition for approval of the MCI WorldCom merger. MCI WorldCom violated the terms of that agreement. It appears that an Internet divestiture will not resolve the anti-competitive problems that would result from this proposed merger.
Clearly, this merger would violate the pro-competitive intent of the Telecommunications Act of 1996. Federal Communications Commission Chairman William Kennard has called it a "surrender" in the price war in the long distance market.
The combination of these two companies would also likely lead to significant job loss. MCI WorldCom laid off several thousand employees after that merger. Job loss will be far higher if this merger takes place, since it would reduce from two separate telecommunications networks into one.
Based on the potential for major negative impacts on consumers, telecommunications workers and their families, the AFL-CIO opposes the proposed merger of MCI WorldCom and Sprint.
We will speak up vigorously in opposition to this damaging and harmful merger in our communications with Congress and before all appropriate federal and state government departments, agencies and commissions.
We will work in concert with other labor groups at the international level in efforts to stop this harmful merger.