[Congressional Record Volume 146, Number 81 (Friday, June 23, 2000)]
[Extensions of Remarks]
[Page E1108]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                         SPRINT-WORLDCOM MERGER

                                 ______
                                 

                         HON. MICHAEL G. OXLEY

                                of ohio

                    in the house of representatives

                         Friday, June 23, 2000

  Mr. OXLEY. Mr. Speaker, as a strong supporter of free markets and the 
Sprint-WorldCom merger, I wish to bring the lead editorial from today's 
Wall Street Journal to the attention of my colleagues.
  On both sides of the Atlantic, there persists a certain regulatory 
bias against large corporate combinations. I believe regulators commit 
an error when they scrutinize such alliances on a regional basis 
instead of taking a global perspective. Such mergers offer efficiencies 
and synergies very much in demand in the age of instant global 
communications.
  Again, Mr. Speaker, I submit the following editorial.

             [From the Wall Street Journal, June 23, 2000]

                          Super Mario Smothers

       Look out, Mario Monti is in town. While it seems unlikely 
     that U.S. unemployment will shoot up right away to German 
     levels or Silicon Valley will suddenly take on the 
     lugubriousness of a French panel in charge of setting lawn 
     mower standards, you can't be too careful when the European 
     Commission's ``competition'' czar is visiting.
       Mr. Monti arrived in Washington yesterday to bring us his 
     unique perspective on the pending Spring-WorldCom merger. His 
     meeting agenda included Janet Reno and Joel Klein and the 
     FCC's Bill Kennard. No wonder the markets went all languid 
     yesterday.
       Though Internet services aren't a big part of this landmark 
     deal, Mr. Monti has decided to grab the opportunity to make 
     WorldCom cough up UU-Net, its wholly owned Internet backbone 
     carrier, which hauls a large share of Europe's web traffic. 
     Never mind that others are rapidly adding backbone capacity. 
     Never mind that this new investment is more likely to dry up 
     if Europe is seen punishing those who successfully invested 
     in the past. Mr. Monti has decided WorldCom's share is ``too 
     big'' according to some static gauge of industry 
     concentration. It's not his job to notice other dynamic 
     factors in a rapidly advancing industry that make his gauge 
     irrelevant.
       It's hard to say what's worse, Mr. Monti's academic 
     rigidity or the Clinton Justice Department's notion that it 
     can fine-tune ``innovation'' to a fare-thee-well.
       We'll wait to be apprised of Justice's full reasoning for 
     aligning with Mr. Monti in trying to scuttle the merger. The 
     latest leaks say Justice is taking its advice from the 
     company's long-distance competitors Qwest and Level Three 
     Communications. Let's see: These other companies fear that 
     WorldCom would be a formidable competitor, so the Justice 
     Department is opposing the deal as . . . anticompetitive?
       Whatever he comes up with for this one, antitrust chief 
     Joel Klein has lately been on a bender claiming that his 
     ministrations are necessary to free up technological advance, 
     which apparently is something lacking in our economy. Perhaps 
     we need more lessons on this from dynamic Europe.
       What seems to be missing on both sides of the Atlantic is a 
     little humility. These days the best minds in industry are 
     regularly caught flat-footed by change. Why should somebody 
     who hung around with Bill Clinton at Renaissance Weekend or 
     graduated first in his class from some finishing ecole have 
     any better handle on the direction of markets and technology?
       At some point the danger is going to manifest itself in 
     lost jobs and opportunities for middle-class voters. If 
     businesses are not allowed to move forward, they stagnate and 
     die. If enough businesses are blocked from moving ahead, the 
     whole economy slows down. That's a voting issue.
       WorldCom is a good example. Bernie Ebbers assembled a nice 
     collection of telecommunications assets, but he didn't see 
     how important wireless would be. Who did? Cell coverage and 
     bandwidth are improving so rapidly that wireless is becoming 
     many people's primary phone. Unless he can cajole regulators 
     to sign off on the acquisition of Sprint's wireless business, 
     he doesn't have a viable strategy.
       One reason Europe is Europe and we're not is that our 
     companies have been free to adapt. The Founding Fathers 
     granted us rights so we wouldn't be in the position of 
     arguing with our rulers for our freedom on a case-by-case 
     basis. These rights extend even to companies and their 
     shareholders, and just any old reason for blocking their 
     private strategies shouldn't be good enough.
       Indeed, it would be quite a feat if our trustbusters manage 
     single-handedly to bring European-style corporate stasis to 
     the U.S. economy, but they're working on it. We're not 
     talking just about the Microsofts, WorldComs, AOL-Time 
     Warners and other businesses that make the evening news. Late 
     last year the FTC scuttled a Pathmark merger just as the 
     company was trying to break out of the pack by bringing 
     modern supermarkets to the inner city. Last month Pathmark 
     filed for Chapter 11. Too bad for Harlem, which was just 
     about to get a new store.
       Hmm, maybe we know why the Europeans sent Mr. Monti to 
     Washington after all. It's part of their comeback plan to 
     offload their antitrust hang-ups on U.S. companies so their 
     own economies can catch up. Only in a Clinton presidency 
     could they think such a strategy might take wing.