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MCI deal raises eyebrows
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November 11, 1997: 3:14 p.m. ET
Some consumer groups are voicing concerns about the $37B acquisition
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NEW YORK (CNNfn) - The world's biggest proposed merger, marrying WorldCom and MCI, could jeopardize competition and threaten Internet pricing, some consumer groups charged on Tuesday.
The major concern among some advocacy groups is that the proposed $37 billion merger would leave only three long-distance carriers in the telephone industry.
"Three competitors are not enough," said James Love, director of the Consumer Project on Technology in Washington, D.C.
Steve Ingish, a spokesman for WorldCom, said he hadn't heard about the concerns and couldn't comment.
Sheila Blackwell, an MCI spokeswoman, argued the two companies have led the drive for more competition in the long-distance market.
"MCI/WorldCom is about competition," Blackwell said.
The Consumer Federation of America is worried that MCI may change its plans to get into the local residential market, said Mark Cooper, the organization's director.
Cooper said WorldCom was probably a better suitor than one of the Baby Bells. The Baby Bells have done a poor job of encouraging competition in the local market, he said.
"I firmly believe people are overpaying for local telephone service by $8 billion to $15 billion," Cooper said.
Cooper acknowledged it is inevitable that a buyer would step forward for MCI. "We'd love to have a lot of free-standing companies, but we can't have that in MCI's case. Too many people want to buy it."
Love said another worry is that MCI will push for changes in Internet pricing to make it comparable to phone usage. Under the current system, Internet users pay much less, he said.
"We don't want MCI to have control of the Internet infrastructure," Love said.
Blackwell said MCI will follow market demand in Internet pricing. "We'll follow what customers are looking for," he said. 
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