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RealTime IT News

Group Blasts Verizon-MCI Merger

The California ISP Association (CISPA), the largest state association of Internet service providers in the country, says the proposed merger between Verizon and MCI is a bad connection.

In a hearing today before the California Public Utilities Commission (CPUC), Mark Esser, vice president of CISPA's board of directors, said the deal would change the structure of telecommunication coverage areas in California, as well as create monopolies in certain geographical areas.

"Duopolies or oligopolies do not create competition in the market place," Esser said in a statement delivered to the committee and later released to the media.

Verizon and MCI agreed to the nearly $7 billion merger in February, but must get federal approval, as well as approval from several states, including California.

Opponents of the merger, both in California and elsewhere, have long argued that consumers will pay higher prices because the new firm's reach will be so broad.

"The amended Telecommunication Act was designed to bring competition, with the purpose of having the large phone companies compete with each other for customers," said Esser.

Verizon and MCI have said the merger is not anti-competitive and will improve services for large business, government and broadband users by making MCI's broadband network available to Verizon. MCI has said it expects the merger to be complete by the end of the year.

In a statement, MCI said the CISPA's comments were "largely a replay of material aired several times already." What's more, the telecom said it has addressed the concerns in filings with state and federal regulators.

"The Verizon-MCI transaction will benefit customers and the economy while allowing the new combination to compete effectively in a changing marketplace," MCI said. " Nobody can 'control' this new marketplace."

Verizon-MCI will have only a 16 percent to 22 percent share of the enterprise market, MCI said.