Sprint chief fears for future for MCI WorldCom merger

NEWS William Esrey, CEO of Sprint, has said he's doubtful whether the telco's proposed $130m merger with MCI WorldCom will be given government clearance. According to reports on the BBC, Esrey has told Sprint's shareholders that the US Justice Department staff are recommending the deal be blocked, and despite lengthy discussions, the senior officials at the Justice Department are taking the recommendations seriously. The merger would give the two companies control of more than 50 per cent of the global Internet infrastructure. Competition officials in the US and EU have suggested that in order for the deal to proceed some elements of that infrastructure would have to be divested. Last week, Internet company GTS filed a complaint to the EC Competition Commissioner Mario Monti about the merger - claiming it would damage the European market. However, it says divesting one of the two companies' Internet businesses will not be enough as they'd still have a monopoly over peering agreements among ISPs. A decision is expected from the US Department of Justice at the end of June, while the EC has until 12 July to consider the options.