GTE Corp.'s $750 million bid to buy the communications assets of Southern Pacific Co., including its discount Sprint long-distance service, "poses some problems," the government's top antitrust official said yesterday.
"The combination of telephone operating companies and competitive communications activities within a single corporate roof is worrisome," Assistant Attorney General William F. Baxter said in an interview. "We're going to have to look at [the acquisition proposal] very carefully."
The acquisition, announced Friday, would give GTE, the nation's second-largest telephone company, a substantial foothold in the ever-growing long-distance market. Antitrust officials are concerned, however, that GTE's current hold over local telephone service could give it an unfair advantage over its long-distance competitors, including American Telephone & Telegraph Co. and MCI Communication Corp., in trying to win business.
It was this same concern and others that pressed the Justice Department to call for the breakup of AT&T.
The GTE proposal would present "the same old structural thing we've seen before," Baxter said. But he indicated that the problems may not be large enough to prompt the Justice Department to block the acquisition in court. "The world is a different place" as a result of AT&T's agreement to divest itself of its 22 local operating companies in 1984, Baxter said.