Verizon is buying MCI for $6.8 billion, a whopping $500 million less than what Qwest had offered the company, according to Wall Street Journal. Clearly, this is continuation of the trend of big telecom mergers – third in less two months. After Sprint-Nextel merger, SBC & AT&T tied the knot, and now MCI-Verizon. It is a rapid consolidation, the speed of which has left many insiders amazed. The deal while done, is not over. Qwest can come in and still bust up the party.
There will be some regulatory problems for this deal. Why? Because Verizon is the primary access provider to most of US government related entities. And by buying MCI, they could have a monopolistic situation over that business, and as a result this could draw the ire of the regulators. My sources tell me, this is the main problem with a proposed marriage between AT&T and Verizon. The rumors of that deal have been percolating slowly, and why it was killed. The regulators.
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* Sordid Saga of MCI