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States probe MCI merger
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March 12, 1998: 3:16 p.m. ET
State attorneys general ask Justice Department to probe WorldCom deal
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NEW YORK (CNNfn) - A group of state attorneys general has joined the U.S. Department of Justice in calling for an investigation into the $37 billion mega-merger between MCI Communications Corp. and WorldCom Inc.
At a news conference in Washington, South Carolina Attorney General Charles Condon and Virginia Attorney General Mark Earley said they have asked U.S. Attorney General Janet Reno for a thorough investigation.
"There is now, amongst the states, a working group that is beginning an investigation," Condon told reporters.
The opposition comes a day after shareholders of both companies approved the proposed merger by an overwhelming margin at meetings in Jackson, Miss., and South Sioux City, Neb.
But the Justice Department already has expressed its concern about the control that MCI-WorldCom could have on the burgeoning Internet marketplace.
The companies have said the combined entity will control 20 percent of revenue. But analysts and competitors contend the company would control more than half of the overall capacity.
The two state attorneys general compared the scenario to the control exercised by the old Bell System. "It's reminiscent of what happened with the monopolies of the phone companies," Condon said.
To be sure, the state officials acknowledged that effects on pricing and access have been limited thus far.
"This merger may prove to preserve all those good things. We just want to make sure," Earley said.
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