[Federal Register Volume 64, Number 7 (Tuesday, January 12, 1999)]
[Notices]
[Pages 1822-1823]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 99-610]
-----------------------------------------------------------------------
DEPARTMENT OF JUSTICE
Antitrust Division
U.S. versus Concert plc and MCI Communications Corporation;
United States Notice of Defendant's Motion to Terminate Modified Final
Judgment
Notice is hereby given that MCI WorldCom, Inc. (``MCI WorldCom''),
successor-in-interest to defendant MCI Communications Corporation
(``MCI''), and British Telecommunications plc (``BT''), predecessor-in-
interest to defendant Concert plc, have moved to terminate the Modified
Final Judgment entered by this Court on September 16, 1997. In a
stipulation also filed with the Court, the Department of Justice
(``Department'') has tentatively consented to termination of the
Judgment, but has reserved the right to withdraw its consent pending
receipt of public comments.
On June 15, 1994, the United States filed its complaint in this
case. The complaint alleged that the acquisition by British
Telecommunications plc (``BT'') of a 20% ownership interest in MCI
Communications Corporation (``MCI'') created an incentive for BT, using
its existing market power in the
[[Page 1823]]
United Kingdom, to favor MCI at the expense of other United States
international carriers in the market or markets for international
telecommunications services between the United States and the United
Kingdom. The complaint also alleged that the formation of a joint
venture between BT and MCI to provide seamless global network services
to multinational corporations created an incentive for BT to use its
dominance in the UK to favor the joint venture at the expense of other
global network service providers in the provision of the UK segment
essential to any seamless global network.
The Final Judgment, filed contemporaneously with the complaint and
entered by the Court on September 29, 1994 after a Tunney Act review,
contained three categories of provisions designed to remedy the
anticompetitive effects of the partial acquisition: (1) transparency or
reporting provisions; (2) confidentiality provisions; and (3) a
provision relating to International Simple Resale (``ISR''). These
provisions were specifically designed to diminish the risk that BT
would successfully act on its incentive to use its market power to
discriminate in favor of MCI or the joint venture. After the Final
Judgment was entered, BT and MCI consummated BT's 20% acquisition and
formed the joint venture known as Concert Communications Company.
In November 1996, BT and MCI entered into a Merger Agreement and
Plan of Merger pursuant to which BT agreed to acquire the remaining 80%
of MCI. The new parent company was to be renamed Concert plc. Although
the Department had thoroughly analyzed all of the competitive
consequences associated with BT's initial 20% acquisition of MCI, the
Department undertook an evaluation of the changes in market conditions
since 1994 in order to determine whether a modification of the existing
decree was appropriate under the circumstances.
As a result of its new analysis, the Department concluded that BT's
incentives and ability to discriminate against MCI's and Concert's
competitors still existed. Consequently, the Department recommended
that the provisions of the Final Judgment aimed at deterring and
detecting discrimination be retained and, in some circumstances,
strengthened. In addition, the Department determined that certain
modifications to the confidentiality provisions were necessary in order
to ensure that the proposed full integration of BT and MCI would not
impair the effectiveness of the protection afforded by the Final
Judgment. On September 16, 1997, after fully considering the comments
received and the United States' response to those comments, the Court
entered the Modified Final Judgment proposed by the parties.
Thereafter, on November 9, 1997, MCI and BT terminated their merger
agreement and BT agreed to acquire MCI's 24.9% interest in the Concert
joint venture. Contemporaneously therewith, MCI entered into a new
merger agreement with WorldCom, Inc. (``WorldCom''), and WorldCom
agreed to acquire BT's 20% interest in MCI. On September 15, 1998, the
foregoing transactions were consummated. Currently, BT has no equity
interest in MCI or MCI WorldCom. Conversely, neither MCI WorldCom nor
MCI has any equity interest in the Concert joint venture.
The Department, MCI WorldCom and BT have filed memoranda with the
Court setting forth the reasons why they believe that termination of
the Modified Final Judgment would serve the public interest. Copies of
MCI WorldCom's and BT's motion to terminate, the stipulation containing
the Department's consent, the supporting memoranda, and all additional
papers filed with the Court in connection with this motion will be
available for inspection at the Antitrust Documents Group of the
Antitrust Division, U.S. Department of Justice, Room 215, North Liberty
Place Building, 325 7th Street, N.W., Washington, D.C. 20004, and at
the Office of the Clerk of the United States District Court for the
District of Columbia. Copies of these materials may be obtained from
the Antitrust Division upon request and payment of the duplicating fee
determined by Department of Justice regulations.
Interested persons may submit comments regarding the proposed
termination of the Judgment to the Department. Such comments must be
received by the Antitrust Division within sixty (60) days and will be
filed with the Court by the Department. Comments should be addressed to
Donald J. Russell, Chief, Telecommunications Task Force, Antitrust
Division, U.S. Department of Justice, 1401 H Street, N.W., Suite 8000,
Washington, D.C. 20005, telephone (202) 514-6381.
Constance K. Robinson,
Director of Operations & Merger Enforcement, Antitrust Division.
[FR Doc. 99-610 Filed 1-11-99; 8:45 am]
BILLING CODE 4410-11-M