IP: FCC Filing Re: Worldcom-MCI Merger (fwd)

[Dave Farber <farber () cis upenn edu>]

From:          Deb Howard <deb.howard () 2COWHERD NET>
Subject:       FCC Filing re:  Worldcom-MCI Merger
To:            ISPC-LIST () ISPC ORG


SENT BY FEDERAL EXPRESS PRIORITY DELIVERY
Discussed with Charles Smith, ISP/C President; and Justin Newton, ISP/C
Policy Director prior to sending.
ISP/C Membership Signup Form available at:  


   http://www.ispc.org/info_form.shtml


March 20, 1998


Secretary, FCC
1919 M Street, NW
Washington, D.C.   20554


Re:  CC Docket #97-211




To the Federal Communications Commission:


As the largest international trade association of ISPs representing 165
members in 42 states and 10 international countries, the Internet Service
Providers' Consortium (ISP/C) has a strong interest in Internet matters
presented before the Commission.   Comprised primarily of small to mid-size
regional providers, the ISP/C appreciates this opportunity to submit
comments on behalf of our members in regard to the above docket number
soliciting commentary on the proposed Worldcom-MCI merger.


The ISP/C urges caution in FCC's assessment of the implications of this
merger, in particular the possible anti-competitive aspects of concentrating
such a large percentage of the Internet's "backbone" connectivity in one
company.  In principle and in practice, the ISP/C is strongly dedicated to
encouraging free market enterprise and prevention of monopolistic business
practices.


As Worldcom already owns UUNet, Gridnet, and ANS, the addition of
InternetMCI to their portfolio would mean that up to 50 percent of the
backbone would be controlled by one corporate entity, with implications
leading us to conclude there would be serious anti-competitive threats to
our industry.  Worldcom's UUNet division has made recent changes in its
peering and pricing policies which lead us to be concerned about possible
predatory actions in this regard.  Furthermore, Worldcom has control of most
of the peering points domestically through its MFS division, while
international peering points are controlled by Worldcom's division of UUNet.
This level of control of major peering points already concentrates an
inordinate amount of power in one entity.  If the merger is approved, we
urge strong consideration to the divestment of InternetMCI from the merger
equation.


In terms of Internet transmission facilities, Worldcom sub-leases long-term
fiber connections through long haul cable plants, providing rights of way
and diverse path routing cross-leased to AT&T, Sprint, Savvis, Qwest, and


other entities.  Through Worldcom's control of fiber transmission facilities
and pipeline rights of way, the extent of their underlying capacity poses a
reasonable threat to a broad spectrum of traditional stratification in the
telecommunications marketplace.


Page 2 of 2, Internet Service Providers' Consortium Comments
CC Docket Number 97-211


The aggregation of services provided by Worldcom presents a "one stop
shopping model" that could harm competition on a number of fronts.  At the
present time, the one and only fact separating Worldcom from being a total
vertical and horizontal monopoly is their lack of presence in equipment
manufacturing and customer premise equipment.  If Worldcom were to enter the
equipment market, they would effectively control and regulate competition in
regard to Internet connectivity and would in effect be able to determine the
market.  The fact that Worldcom is effectively only one market away from
complete domination of significant Internet industry segments is yet another
indication to us of the strong need for additional scrutiny by the FCC in
regard to the proposed acquisition of MCI by Worldcom.


Thank you for allowing us to make these brief comments.  Should you have any
questions, please do not hesitate to contact me at 310-448-1680.


Sincerely yours,


Deborah A. Howard, MPH
Chair of the Board and Executive Director
on behalf of the ISP/C


cc:     Janice Myles
        International Transcription Services, Inc.
        ISP/C Board of Directors
        ISP/C Members
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Deborah A. Howard, MPH, Partner
2 COW HERD, Venice Beach, CA's Original ISP
(310) 448-1680  (phone)   (310) 827-5355 (FAX)


http://www.2cowherd.net  deb.howard () 2cowherd net
Chair of the Board and Executive Director, ISP/C


http://www.ispc.org     http://www.euro.ispc.org
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