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Sprint Challenges Bell Atlantic and GTE Merger, Cites Anticompetitive Effects

Strategic Insights

— 1 min read

The proposed merger between Bell Atlantic and GTE is facing opposition from Sprint, a global communications company, which claims that the merger will lead to higher prices and reduced competition for Kentucky consumers. Sprint officials participated in a Kentucky Public Service Commission hearing in Frankfort, arguing that the merger would give the new company increased incentive and ability to keep other competitors out of the market. Sprint has filed written testimony with the Commission, stating that the companies misstate the potential benefits of the merger and that any benefits do not overcome the detriments stemming from the anticompetitive effects.

Key Takeaways:

  • Sprint opposes the proposed merger between Bell Atlantic and GTE, citing anticompetitive effects that would lead to higher prices and reduced competition for Kentucky consumers.
  • The merger would eliminate Bell Atlantic as a potential local competitor with GTE in Kentucky, leading to higher prices and reduced choices for consumers.
  • The merged company would have a 42% market share in long-distance calls, giving it significant control over long-distance competition.
  • Sprint argues that competition, not size, drives innovation and customer service, and that the merger would reduce competition and limit innovation.
  • The Kentucky Public Service Commission has ordered the companies to refile their request with additional information about the merger and its impacts.
  • Bell Atlantic has 13 states and the District of Columbia as its service area, while GTE primarily serves Kentucky.

Statistics:

  • 42% of all long-distance calls begin and end in the territory controlled by the merged company.
  • Sprint has annual revenues of $17 billion and serves more than 20 million business and residential customers.
  • Bell Atlantic provides service in 13 states and the District of Columbia.
  • The merged company would become a more substantial monopoly with greater incentive and ability to keep other competitors out.

Sources:

  • "Sprint Reaction to Proposed Bell Atlantic - GTE Merger Provides Factual Testimony to Kentucky Public Service Commission"
  • "Kentucky Public Service Commission Denies Bell Atlantic - GTE Merger, Offers Opportunity to Refile with Additional Information"

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