Monday, April 18, 2005

XO Cites Antitrust/Anti-Competitive Issues in Telecom Mega-Mergers

SBC's acquisition of AT&T and Verizon's proposed acquisition of MCI will fundamentally reshape the telecommunications industry by combining the two largest local monopolies with their two largest competitors, doing irreparable harm to customers' choices and industry innovation, testified Carl Grivner, CEO of XO Communications, at a U.S. Senate Judiciary Committee hearing.


"If these mergers are approved, SBC and Verizon will control nearly 80 percent of the business wireline market, more than 63 percent of ILEC lines, and more than half of all wireless subscribers nationwide," Grivner added. "It is not consolidation that is the paramount concern. It is the massive concentration of market power and injury to customers that will result from these mergers."


Grivner downplayed the competitive threat SBC and Verizon claim from new technologies, such as cable telephony, VoIP and wireless. "Razzle-dazzle and hype about futuristic competitive alternatives or distant possibilities for market convergence have no place in the analysis of these mergers. Determinations need to based on facts engrained in current market realities, and I believe once this is done the conclusion will be clear: these mergers are bad for customers of all types and in all locations," he said.


Finally, Grivner believes that SBC and Verizon will continue their practice of not competing with each other after their acquisitions of AT&T and MCI are completed.

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