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GTE Challenges WorldCom-MCI Merger

May 09, 1998|Times Wire Services

GTE Corp., which lost a bidding war for MCI Communications Inc. last year, said it filed an antitrust lawsuit seeking to block WorldCom Inc.'s $37-billion acquisition of MCI. The suit, filed in U.S. District Court in Washington, contends that a WorldCom-MCI merger would crimp competition and possibly raise prices in the Internet and long-distance businesses. An MCI spokesman said GTE is simply worried about competition. Stamford, Conn.-based GTE contends that a combined MCI-WorldCom would control between 40% and 60% of the critical Internet "backbone" network that transmits data for Internet service providers. The suit also alleges there would be significantly diminished competition in the retail long-distance market created by merging MCI, the second-largest long-distance company, and WorldCom, the fourth-largest. GTE stock rose $1.81 to close at $18.50 on the New York Stock Exchange. Jackson, Miss.-based WorldCom's shares rose 25 cents to close at $43.06, and MCI shares closed up 63 cents at $50.06. Both trade on Nasdaq.

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