FCC Approves MCI-WORLDCOM Merger

Ten years ago, the Federal Communications Commission conditionally approved WorldCom's purchase of MCI, removing the last hurdle for completion of the deal. In an unanimous vote, with Commissioner Gloria Tristani dissenting in part, the FCC placed two conditions on the merger: 1) MCI had to complete the sale of its Internet assets to Cable & Wireless before completing the merger; and 2) the transfer of MCI's direct broadcast satellite (DBS) license to WorldCom was subject to the outcome of then-pending applications for review of the license that was granted to MCI. The Commission said it approved the merger because the combined company would be able to enter the local phone market "more quickly than either company could do on its own." It also said the merger was consistent with the "pro-competitive, de-regulatory" framework of the Telecommunications Act of 1996 and would produce "tangible benefits to consumers." Commissioner Tristani said she dissented because she wanted the FCC to impose "some sort of" reporting requirement to monitor the company's progress in the local market.