MCI WorldCom Inc. chief executive Bernard J. Ebbers yesterday dismissed suggestions that his company faces long odds as it seeks to take control of Sprint Corp. in a $129 billion merger, expressing optimism that federal regulators will approve the deal later this year.
"We certainly are confident that, with minor modifications, we'll be able to show it's pro-competitive," Ebbers said after an appearance before a packed ballroom at the National Press Club.
Both MCI WorldCom and Sprint have acknowledged they may need to sell off some of their Internet "backbone," the web of wiring that carries computer traffic, to win the blessing of federal antitrust authorities. But Ebbers pointedly rejected speculation that such a sale might include UUNet--MCI WorldCom's backbone, and a fast-growing profit machine--indicating the companies are prepared to part only with Sprint's network.
"We would never sell off the Internet backbone," Ebbers said.
Ebbers used his appearance before a room full of Washington journalists to sell his deal with Sprint as a boon to consumers in a time of growing competition. The burly chief executive portrayed the merger as the only way to ensure consumers will have choice in an era when telecommunications are increasingly dominated by a handful of huge companies, and as local Bell companies gain permission to expand from their local markets into long-distance.
The deal has spawned concerns about the effects of fusing the nation's second- and third-largest long-distance telephone companies into one, leaving about 80 percent of the market in the hands of AT&T Corp. and the new WorldCom. Ebbers said, "Those perceptions are far out of date."
As he portrayed it, modern-day competition is defined by the Internet and deregulation, which have eroded the old borders between the local and long-distance markets. Companies are seeking to sell customers "bundles" of services--local and long-distance, along with wireless connections and the Internet in one neat package.
"In traditional telecommunications, distance was a crucial variable," Ebbers said. "But that variable--distance--is disappearing."
Ebbers also sought to undercut arguments that the merger might leave the new WorldCom able to raise long-distance prices, asserting that the long-distance business today holds more than 600 companies.
As proof of the arrival of new entrants, he offered a simple image: streets being ripped open to bury more fiber-optic cables--the lifeblood of telecommunications.
CAPTION: MCI WorldCom's Bernard Ebbers yesterday rejected speculation that the firm's UUNet unit would be sold.