BRUSSELS, May 12: Worldcom Inc and MCI Communications Corp were expected to tell a hearing organised by the European Union antitrust watchdog on Tuesday that their merger would not give them control of the Internet.WorldCom's $37 billion acquisition of MCI has come under heavy criticism in the United States from rival telecommunications firms, particularly GTE Corp.
The European Commission, the EU's clearing house for large mergers and acquisitions, has also expressed concerns about the two partners' combined holding of Internet backbone services.
Although both companies are based in the United States they need EU regulatory approval because they do important business in the 15-nation bloc.
WorldCom's European spokesman Mark Weeks said he was confident most fears arose from a basic misunderstanding of how the Internet global computer online service works. The two companies' share of the market was not as big as GTE claimed, he said.
"We do not believe there is an Internet backbone, there areanumber of Internet backbones," Weeks told Reuters.
"By our estimation, based on revenue, we have some 20 per cent of the entire Internet market," he said.
GTE has contended that WorldCom and MCI would together own between 40 per cent and 60 per cent of the critical Internet backbone that transmits and routes data for consumers and Internet service providers (ISPs).
The hearing is expected to focus on how to measure whetherthe merged entity would, indeed, create or strengthen a dominant position to the extent it would harm competition in the European sector of what is a global market.
GTE's executive vice-president William Barr was expected to attend the hearing which will continue on Wednesday, when it will be the turn for competitors and other interested parties to express their views.
Sprint Corp, another US telecom firm, was also due to attend. It was unclear, however, whether any ISPs would be represented.
The Commission is not expected to comment on the outcome of the hearing, which is partof the procedure for merger investigations in the EU. It has until mid-July to reach a verdict.
The Commission has been cooperating closely with its US competition authority counterpart, the Justice Department, to try to avoid conflicting conclusions on the merger.
Copyright © 1998 Indian Express Newspapers (Bombay) Ltd.
