Public Advocate Witnesses Urge That Verizon/MCI Merger

September 21, 2005

September 15, 2005 PRESS RELEASE

Public Advocate Witnesses Urge That Verizon/MCI Merger be Approved - if at All - With Major Conditions That Promote Competition and Broadband Deployment

Last week the Public Advocate filed testimony at the Maine Public Utilities Commission (PUC) that underscored the importance of conditions on any PUC approval of the proposed merger of Verizon and MCI. In the absence of meaningful conditions, “customers in Maine who rely on Verizon or MCI for local phone service may no longer receive the benefits of pressure from competitors according to Public Advocate Stephen Ward. “We also have argued that, as a condition of merger approval, Verizon must make broadband services available to all of its customers in Maine within three years,” Ward stated.

The Public Advocate’s testimony included data from a survey conducted this spring by SMS/Pan Atlantic which established that, for a statistically valid sample of residential customers in Verizon’s service territory, almost 90% of customers currently take local phone service from either Verizon or MCI. “This leaves 10% of customers in Verizon’s territory taking local service from any other provider,” Ward stated. “Such a high degree of market dominance by the merged Verizon/MCI entity does not bode well for competition in Maine.”

The Office also filed the testimony of Dr. Robert Loube of Rhoads and Sinon in Arlington, Virginia, addressing the merger guidelines that the U.S. Department of Justice applies in assessing whether a proposed merger should be rejected an anti-competitive. Dr. Loube concludes that the proposed Verizon/MCI merger does not satisfy the Department of Justice’s merger guidelines and recommends therefore that the Maine PUC reject the merger application. In the alternative, Dr. Loube urged the Maine PUC to impose seven specific conditions on any merger approval that are designed to promote more competition in Maine for local phone service and to require Verizon to more aggressively deploy broadband Internet service.

The testimony of Dr. Loube and of the Public Advocate’s staff economist, Dr. Ronald Norton, and his associate Dr. Thomas Sexton will be considered by the Maine PUC as it evaluates Verizon’s request for approval of its merger with MCI.

The Public Advocate Office is an eight-person state agency in Hallowell, Maine whose mission is to promote lower rates, better service and vigorous competition, where possible, for utilities doing business in Maine and their customers.

For further information contact: Stephen G. Ward, Public Advocate or William C. Black at 287-2445, # 112 State House Station, Augusta, Maine 04333-0112.