WASHINGTON (Dow Jones)--Telecommunications executives told Congress Wednesday that market and technological forces are driving consolidation and that mergers won't harm consumers.
"Competition from wireless, cable telephony, e-mail, Instant Messaging and VoIP will continue to drive pricing, with or without this transaction," said Ivan Seidenberg, chief executive of Verizon Communications Inc. (VZ), in prepared testimony to the House Commerce Committee.
Verizon last month announced plans to buy MCI Inc. (MCIP) for $6.75 billion. Qwest Communications International Inc. (Q) has also made a bid for MCI.
"To view this deal in terms of the communications business of the past 20 years is to miss the benefits that will accrue in the next 20 years," said Seidenberg.
In addition to Seidenberg and MCI CEO Michael Capellas, panelists included top executives from SBC Communications Inc. (SBC), AT&T Corp. (T), Sprint Corp. (FON) and Nextel Communications Inc. (NXTL).
"The industry is restructuring and re-emerging ... and the SBC-AT&T merger is a direct product of those forces of change," SBC Chief Executive Edward Whitacre said in prepared testimony. SBC has agreed to acquire AT&T Corp. (T) for $16 billion.
Nextel and Sprint in December agreed to merge.
Telecom mergers must be approved by the Federal Communications Commission and Justice Department, and don't require a congressional green light. Still, Congress's views carry a lot of weight with regulators, analysts note.
The Senate Judiciary Committee is also expected to hold hearings on telecom mergers. In a release following news of the proposed Verizon-MCI tie-up, Senators Mike DeWine, R-Ohio, and Herb Kohl, D-Wis., of the Judiciary Committee's antritrust subcommittee said, "ongoing consolidation continues to raise troubling questions about competition and the availability of consumer choice."
Mark Cooper of Consumers Union criticized the deals, saying they'd narrow consumer choices and higher prices.
"If not rejected or dramatically altered, these mergers could set the marketplace back to a world more akin to monopoly than competition," he said in prepared testimony to the House Commerce Committee.
-By Brian Blackstone, Dow Jones Newswires; 202-828-3397; brian.blackstone@dowjones.com
(END) Dow Jones Newswires "
Posted to the site on 2nd March 2005
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