EC fears impact of MCI-WorldCom deal on Internet

The European Commission's (EC) probe into the proposed MCI-WorldCom merger is unlikely to derail the deal, say industry watchers.

The EC has been expanding its enquiry into the largest merger in history, which it fears will impact the telecoms market on this side of the Atlantic as well as give the merged company too much control over the Internet. But the most that the EC can hope for is to force some divestments, and exact a guarantee that MCI-WorldCom will not impede competitors using its Internet backbone.

Although both MCI and WorldCom are US companies, the EC has the power to review mergers it believes could affect competition in Europe.

Together MCI-WorldCom would control more than 60 percent of all US Internet traffic, and have connections with nearly two-thirds of all Internet service providers. Competitors of the merging parties argue that this sort of dominance will have a bad effect on both the pricing and perfornance of the Internet.

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