Sprint Joins Forces with Consumer Groups to Oppose SBC/Ameritech Merger

Strategic Insights -

As the proposed SBC/Ameritech merger continues to spark controversy, Sprint, a leading telecommunications company, has joined forces with consumer groups to petition the Wisconsin Public Service Commission (WPSC) to review the merger. The petitioners, including Sprint, the Citizens' Utility Board, and the American Association of Retired Persons, argue that the merger would eliminate competition in local phone service in Wisconsin, reduce service quality, and stifle innovation.

Key Takeaways:

  • Sprint, along with consumer groups, has petitioned the Wisconsin Public Service Commission (WPSC) to review the proposed SBC/Ameritech merger, citing concerns that it would eliminate competition in local phone service in Wisconsin.
  • The merger would give the merged company greater ability to keep other competitors out, reduce the incentive to lower rates, and stifle new products and services that consumers and businesses want.
  • Ellen D'Amato, Sprint's vice president for state external affairs, warned that the merger would lead to a reduction in service quality, higher prices, and a lack of choice for consumers.
  • The petitioners are calling for the WPSC to conduct an investigation and hearings to provide clear evidence of the merger's impact on competition in Wisconsin local phone service.
  • The proposed merger, along with the Bell Atlantic/GTE merger, would give two giant corporations control over more than two-thirds of the nation's telephone lines, raising concerns about a Bell East and Bell West monopoly.
  • The states of Illinois, Ohio, and Indiana are already investigating the merger and will hold hearings on the SBC/Ameritech merger.
  • Sprint argues that the merger would also threaten the long distance competition that has benefited consumers and reduced rates for years.

Statistics:

  • The proposed merger would eliminate SBC as a potential choice in local phone service in Wisconsin, according to Sprint.
  • Service complaints have at least doubled since Pacific Bell was bought by SBC, affecting former Pacific Bell customers.
  • The merged company would control the territory where more than 45 percent of Sprint long distance calls begin and end.

Sources:

  • Newsbytes, By Steve Gold, "Industry Groups, Sprint Oppose SBC, Ameritech Merger" (1998 Nov 10)
  • Sprint, "Petition to Wisconsin Public Service Commission" (1998)
  • Reported by Newsbytes News Network, http://www.newsbytes.com (19981110)
  • Wisconsin Public Service Commission, "Merger Investigations" (1998)