Members Likely to Ask Telecom CEOs about Investments, Jobs, Competition

The House Commerce Committee is striving to get the CEOs in the 2 latest mergers, AT&T-SBC and Verizon-MCI to testify at its telecom mergers hearing Wed., sources on the Hill and in industry told us. The CEOs of Sprint and Nextel could also be called, sources said, and Qwest Chmn. Dick Notebaert could be a witness. MCI turned down a larger offer from Qwest to accept a merger bid from Verizon. Sources said the hearing will likely include a 2nd panel that could include industry analysts and economists.

Many members will ask how the mergers will affect job creation, a House source told us. Most sources acknowledged that the “synergy” created by the mergers will lead to telecom job loses. “Mergers aren’t new investment,” the House source said. Some members will likely grill CEOs on the level of investment they've put into new telecom services and reflect on the investment promises Bell companies have made in the past.

But an industry source associated with equipment makers said members may ask more questions about competition than about investments and job creation. “We want them to ask about investments, but I think there'll be a lot of talk about competition,” the source said. The source also said members should be asking about how the mergers will affect research and development spending.

One Hill source said anyone closely following the telecom industry shouldn’t be surprised that RBOCs are making efforts to buy the largest remaining long-distance carriers. But one Senate source said several senators are in fact surprised by the merger announcement. The Senate source said there’s some concern among some senators about the proposal. On Thurs., Senate Judiciary Committee Chmn. Specter (R-Pa.) said the full Judiciary Committee or the Antitrust Subcommittee should conduct hearings into the merger. But the Senate source said it was unlikely there would be a similar hearing in the Commerce Committee, particularly since Commerce Committee Chmn. Stevens (R-Alaska) has already had a meeting with top-ranking AT&T and SBC officials about that merger. Sen. Burns (R-Mont.) has expressed concern and his spokeswoman told us that he hopes to meet with top Justice Dept. officials about the merger next week, including possibly Attorney Gen. Alberto Gonzalez.