• E-mail
• Print
• Comment
• Font Size
• Digg
• del.icio.us
• Discuss article

Alliance for Competition in Telecommunications Praises Findings in New York PSC Staff White Paper

Posted on: Thursday, 7 July 2005, 18:00 CDT

A group of facilities-based communications providers, IT solution providers and systems integrators who are members of the Alliance for Competition in Telecommunications (ACTel) today expressed strong agreement with a New York Public Service Commission (PSC) staff White Paper's tentative conclusion that Verizon's proposed merger with MCI will "significantly increase market concentration" and lead to "increasing prices, and/or cause deterioration of service quality."

Basing its analysis on the Hirfandahl-Hirschman Index (HHI), the federal government's standard for measuring market concentration, the New York PSC staff pointed to a major increase in market concentration occurring from the Verizon/MCI merger, impacting both the enterprise transport market for business customers, and the mass market for consumers.

Most significantly, the staff's findings on the proposed merger were sufficiently grave that the PSC may need to consider a combination of divestitures, price controls, quality assurance and contract review measures to prevent anticompetitive harms to New York customers in the event the mergers are approved.

"The New York PSC staff findings are exactly in line with ACTel's own studies based on the same HHI parameters, and they lend credence to the substantial concerns consumers and business customers have with both the proposed Verizon/MCI and SBC/AT&T mergers," said Heather Gold, Senior Vice President - Government Relations, at XO Communications, a member of ACTel. "By rigorously analyzing and demonstrating the real competitive harms that flow from the proposed merger, the staff provides a road map for federal and other state officials reviewing these proposed mergers."

The New York PSC staff White Paper raised the potential need to implement strong remedies to counter merger-imposed market concentration in New York's telecom market, one of the nation's largest. In the enterprise transport market, such remedies might include:

-- Continuation of Wholesale Rates by MCI. MCI would be required to continue providing smaller carriers the same rates, terms and conditions for wholesales services now available, for a period of 36 months after the merger.

-- Standardized Competitive Rates. Rates for transport services now covered in commercial agreements between Verizon and competitive local exchange carriers (CLECS) would continue to be made available to ensure competition in the market.

-- Expansion of Performance Metrics. The New York PSC may find it necessary to implement expanded retail and wholesale contract performance metrics to monitor market concentration, and might also be required to take on an enforcement role.

-- Divestiture of MCI's New York Transport Network. To offset the inevitable increase in market concentration created by the merger, the Commission may require MCI to divest these assets.

About ACTel

The Alliance for Competition in Telecommunications (ACTel) represents leading providers of competitive communications services and IT solution providers that have joined together to challenge the mergers of SBC/AT&T and Verizon/MCI, which if consummated as proposed will create significant harms to the public interest - reducing choice, elevating costs to customers, and slowing innovation. Information on ACTel is available at www.allianceforcompetition.com

Source: Business Wire

More News in this Category