Although the European Commission dismissed press reports that it was about to block the mega-merger of Worldcom and MCI, it has concluded a two-day session to hear objections, primarily from former MCI suitor GTE.
GTE said after the hearing that it was "confident" that EU and US antitrust authorities would ensure that the merger was not anti-competitive. US authorities were observers at the meeting.
"GTE presented to the Commission arguments in support of its statement of objections against the merger. The focus was on the threat of Internet dominance by the number one and number two backbone providers," a spokesperson for GTE said.
The hearings were "thorough and effective in their examination of the threat to competition from the merger, especially the monopolisation of the Internet", he added.
GTE will continue to cooperate with the antitrust authorities as they continue their inquiries, he said, without giving more details.
Before the hearings, Commission sources said the aim of the hearing was to more accurately determine the merger's impact on the market by looking at different definitions of this new sector.
MCI and Worldcom earlier issued a 'fact sheet' on why the merger is pro-competitive and pro-consumer, which claimed that neither company is dominant in any telephony market and that the combined entity will face large competitors.
MCI-Worldcom said opposition is led by GTE, the second largest US Internet access provider, which fears competition from the merged group in local, Internet and long distance markets. But it continued that most of GTE's claims are "fallacies of the Internet" - that MCI-Worldcom would "control" 50 per cent of the world's Internet traffic; and would use its power to set prices to Internet service providers.
The only accepted index of market share is revenue and in 1997 this showed the merged group with about 21 per cent of the US Internet access market, the document went on.
Total network traffic estimates can easily add up to more than 100 per cent because the same traffic is passed from one ISP to another, it said.
Numbers of customers, ISP connections, or capacity measures are also inaccurate measures of traffic flow, it argued, saying that there are no significant barriers to entry for new players, and that significant competitors such as AT&T, GTE and Sprint are investing in Internet services.
A spokesman for MCI said his company had "refuted the assertions made by our competitors" over the two-day hearing by providing a lot of information on how open and competitive the Internet market is.
"We explained just how difficult it is to accurately measure Internet traffic in a market that is growing so fast. We maintain all along that the best guess of market share is revenue," he said.
He declined to say whether the hearings discussed possible remedies to meet the Commission's concerns and noted how the EC had rejected as "rubbish" a reported requirement to sell Worldcom's UUNet ISP unit.
"We remain optimistic that we will close the merger by the summer," he said.
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