The European Commission has threatened to block the formation of the massive European Uniworld telecommunications alliance spearheaded by AT&T Corp, unless AT&T allows greater competition in the US. According to Reuter, a source close to European Competition Commissioner Karel Van Miert claimed a letter was sent to the US Justice Department asking AT&T to be more flexible regarding European rivals’ demands to interconnect with its infrastructure. Despite lack of detail, the report alleged that it was feared AT&T would limit interconnection rights to its European partners in the Uniworld joint venture or charge discriminatory prices. If AT&T agrees to open the market to telecommunications operators other than those it has an agreement with, we will no doubt be in a position to (clear the deal), the source told Reuters. Despite this, claims that the Commission is also trying this to force the US to liberalize its phone markets even more are unlikely, considering that the US offer at the current World Trade Organisation talks in Geneva has already gone far beyond what even the Commission had originally expected. That said, Commission sources believe AT&T still dominates US- European traffic despite its claim that this is no longer the case. Estimates indicate AT&T has 60% of the US-originated traffic between the two sides of the Atlantic. Uniworld’s roots lie in the Unisource consortium, created in 1992 between the telecommunications firms in Switzerland, the Netherlands and Sweden to provide telecommunications infrastructure and services. The inclusion of Telefonica de Espana SA, the European Community’s fifth largest operator, later prompted Community concern that the partners were trying to close their markets to competition. Uniworld was created when the four joined forces with AT&T, which holds a 40% stake. The venture’s goal is to provide seamless pan-European telecommunications services with global communications to the European business market. This is not the first time the Commission tried to pressure large alliances in this way; last year it persuaded Germany and France to liberalize use of alternative infrastructure no later than July 1996 – a breakthrough that cleared the way for the Atlas joint ventures between Deutsche Telekom AG and France Telecom, and their subsequent Global One alliance with Sprint Corp.
