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Sprint deal on the skids
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June 21, 2000: 6:47 a.m. ET
WorldCom's $115 billion buyout of Sprint could be blocked - reports
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NEW YORK (CNNfn) - European regulators are likely to block WorldCom Inc.'s planned $115 billion acquisition of Sprint Corp. while U.S. officials are also expressing growing doubts about the deal, newspaper reports said Wednesday.
The Washington Post reported that European Union regulators are set to block the merger because it would place too much control over the Internet within the network of a single company. EU Competition Commissioner Mario Monti has determined that the commission should block the deal because the companies' proposal to sell Sprint's Internet business is inadequate to address antitrust concerns, the Post said.
Monti plans to convey his recommendation to U.S. antitrust regulators when he arrives in Washington on Wednesday, the report said.
Meanwhile, the Wall Street Journal reported that talks have intensified between the two telecommunications giants and antitrust regulators at the Department of Justice, as they try to convince antitrust chief Joel Klein to bypass his staff's recommendation to halt the mega-merger. The Journal said that the tenor of the talks has shifted from guarded optimism to doubts about whether the deal will be approved by both U.S. and European regulators.
People close to the negotiations told the Journal that the Justice Department's main concern is that the merger would create too much concentration in the long-distance telecommunications market. Those people said that the Justice Department's concerns about concentration in the market for Internet "backbone" service likely would be addressed by the companies' proposal to sell Sprint's Internet backbone.
A spokeswoman for the European Union's executive body declined to comment on the Washington Post report, Reuters news agency reported from Brussels.
WorldCom (WCOM: Research, Estimates) is the largest U.S. long-distance company after AT&T Corp. Sprint Corp (FON: Research, Estimates) is No. 3. On May 18, staff members at the Department of Justice recommended that the government block the merger, according to published reports.
Telecommunications analysts have speculated on whether WorldCom would be forced to shed its prized UUNet Internet unit for the deal to gain approval. WorldCom Vice Chairman John Sidgmore previously said he would cancel the merger before giving the unit up. 
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