The U.S. Department of Justice stepped up its activism another notch earlier this week by moving to block the proposed $120 billion merger between Worldcom and Sprint.  Whenever government bureaucrats dictate how an industry develops, it sets a very dangerous precedent.  And it is particularly worrisome when the plodding hand of government smacks cutting-edge industries like telecommunications.

The notion that competition would somehow suffer in the telecommunications market due to a Worldcom-Sprint merger reflects a daunting ignorance of this dynamic marketplace.  Dividing the market into local, long distance, cellular, cable, etc. no longer makes much economic sense.  Indeed, once the Baby Bells open their local markets to competitors as required under the 1996 Telecommunications Act, it will be a free for all. 

As reported by The Wall Street Journal (June 28), in New York, where Bell Atlantic was recently cleared to offer long distance, the firm has already gained 8 percent of the market.  Incidentally, there already are hundreds of competitors in the long distance arena, with rates falling by 6 percent annually between 1984 and 1998, according to the Journal. 

The efficiencies gained through a Worldcom-Sprint merger likely will be needed as the big Baby Bells, cable giants and others become full-blown competitors.

Technology, innovation and consumer demand are driving the telecommunications market ahead.  Unfortunately, with this attempt to block the Worldcom-Sprint deal, the government once again threatens to mess things up.  Consumers should be the final judge and jury on mergers, not a bunch of inside-the-beltway lawyers and bureaucrats.