GTE today issued the following statement that can be attributed to William P. Barr, Executive Vice President and General Counsel for GTE Corp.
WASHINGTON -- "We are pleased that the European Commission is requiring a complete divestiture of MCI's entire Internet business, both wholesale and retail customers, as a remedy for the threat of monopolization posed by the WorldCom/MCI merger.
"WorldCom started out saying there was 'no problem' on the Internet; then they said, only a 'minor' fix would be needed; and now they are bowing to complete divestiture. It has been a gratifying progression.
"GTE has maintained all along that the Commission should reject the combination of the world's two biggest Internet providers unless and until MCI and WorldCom agree to eliminate any overlap in their Internet businesses through a complete divestiture. The announcement by the Commission today thoroughly vindicates GTE's position. On the merits, the Commission has embraced GTE's views that a combination of these two Internet businesses would be fundamentally anticompetitive. As a remedy the Commission has also agreed with GTE that the previously proposed partial spin-off of Internet assets to Cable & Wireless was wholly inadequate. Today's announcement appears to confirm that the Commission will settle for nothing less from WorldCom/MCI than the total divestiture advocated by GTE.
"GTE's remaining concern is that the European Commission build adequate safeguards to ensure that the spin-out of MCI's Internet business will be durable and fully effective. In particular, it is critical that safeguards are in place to prevent a combined WorldCom/MCI from capturing back the divested Internet customers who currently buy other services from MCI. GTE is committed to working with the European Commission and the Department of Justice, as part of the continuing review of the merger, to achieve that result. Until GTE is satisfied that the necessary safeguards are in place, moreover, GTE will continue to pursue the Internet claims raised in its pending lawsuit challenging the WorldCom/MCI merger.
"The enforcement actions taken by antitrust authorities on the Internet side do not address the serious competitive problems caused by this deal in long distance markets, where MCI and WorldCom are the second and fourth largest carriers. Regardless of the outcome in Europe, GTE, along with other companies, will continue to press its claims on long distance issues before the FCC, the Justice Department and in the district court."