U.S. District Judge Harold H. Greene, who presided over the Bell System breakup, yesterday said he would not overturn the two-year-old merger between GTE Corp. and the Sprint long-distance telephone company if slight modifications were made.
"We are reviewing modifications set forth in Judge Greene's opinion," said Theodore Brophy, GTE Corp. chairman and chief executive officer. "We are glad GTE is very near the end of the government approval process."
One of the modifications bars a telephone monopoly in Hawaii where GTE owns one of its 16 domestic telephone companies. Still another would require GTE local telephone companies to provide high-speed data services through separate subsidiaries indefinitely. A third modification would make it easier for the Justice Department to bring anticompetitive actions against the company in the future.
GTE, the nation's largest independent telephone company, which serves 31 states, must continue to keep its long-distance and local businesses separate, provide equal treatment to all long-distance companies and phase out former joint operations with American Telephone & Telegraph Co.
The merger agreement, hammered out by the Justice Department and GTE after the department filed an antitrust suit contesting the $727 million acquisition from Southern Pacific Co., had originally drawn sharp criticism from long-distance companies such as MCI Communications Corp.
MCI had said allowing GTE to operate both long-distance and local telephone companies could give it an unfair competitive advantage. "Obviously, we're dissappointed with the opinion ," said Donald Campbell, a spokesman for MCI. "We still do not see a heck of a lot of difference between what GTE was allowed to do and AT&T was told not to do." Campbell said he did not think the approval would substantially increase GTE's long-distance marketshare.
Greene noted some similarities between the AT&T and GTE cases. The difference, he wrote in his opinion, is that GTE is not a monopoly.
GTE's acquisition of Sprint "may actually increase competition in the interexchange telecommunications market because it will enable GTE . . . to provide Sprint with the capital investment it needs to compete vigorously with AT&T," Greene said.
Industry analysts had expressed concern that former Bell operating companies, prohibited from providing long-distance service under the terms of the divestiture agreement, would view the merger as a precedent allowing them to reenter the long-distance business.
Regional telephone companies refused to comment on the opinion.