AT&T/BellSouth Merger Approved

If I was a psychiatrist, which I am, I would say that I was turning into some sort of paranoid personality, which I am! — The President’s Analyst

The Federal Communications Commission unanimously approved AT&T Inc.’s $86 billion buyout of BellSouth Corp. on Friday (pdf), reports the AP, creating the world’s largest telecom company. Google News has the latest.

Lawyers for AT&T and the two Democratic commissioners who had opposed the merger hammered out a compromise, the details of which were released Thursday night.

Last night, AT&T submitted a 20-page letter with new concessions (pdf). Unlike the previous letter, this one fully acknowledges network neutrality and implements a fairly serious definition.

Several consumer groups, such as Public Knowledge and the Consumer Federation of America, have applauded the new concessions, reports C/Net. called it “a striking victory for Internet freedom advocates.”

These groups have been strongly opposed to the merger from the beginning and have been working to make sure the FCC imposes some kind of conditions on the merger. At least one of the groups, Consumer Federation of America, was involved in negotiations over the weekend between commissioners and AT&T.

Not everyone is enthusiastic. Susan Crawford says today is The Day the Internet became Cable Television.

Among the conditions offered by AT&T is a promise to observe “network neutrality” principles, an offer of $19.95 per month stand-alone digital subscriber line service, and a vow to divest some wireless spectrum.

You might thank Senator Ron Wyden(Dem-Ore) for his strong stance on Net Neutrality.

AT&T, which dates back more than 125 years to the invention of the phone, has been trying to bolster its bottom line through acquisitions and expand into the television business. Now four of the seven AT&T companies that were spun off from the original AT&T in 1984 are back under one roof.

The merged AT&T includes 66 million telephone lines, 58.7 million Cingular Wireless customers and 11.6 million broadband customers.

Its closest telephone rival, Verizon Communications, has some 46 million access lines, 56.7 million wireless subscribers, and 6.6 million broadband customers. They are also moving into television though FiOS, their fiber to the premises system. Qwest is now the #3 local phone company in the US (behind AT&T and Verizon), serving nearly 15 million access lines in a 14-state region.

Comcast, the largest cable television operator in the United States, now serves a total of 24.1 million cable customers, 12.1 million digital cable customers, 11 million high-speed internet customers, and 2.1 million voice customers, according to Wikipedia. The second-largest cable company in the United States, Time Warner Cable, has some 11 million basic subscribers and operates in 27 states with 31 operating divisions.

DirecTV and Dish Network combined serve about 25 million television customers in the U.S. but lack voice and data connections.

The buyout, now valued at about $86 billion, was announced nine months ago. The combined company will still have its corporate headquarters in San Antonio and most of its executive management will come from the AT&T side.

According to the Chicago Tribune, the merger will bring together more than a third of the nation’s land lines and allow AT&T to dominate local service in California and 21 other states. It would hold 23% of the broadband Internet market, leave nearly 95% of the offices in major cities without real choice in service and run the nation’s largest cellular carrier, Cingular Wireless.

It would also give AT&T greater control over the backbone network that connects both land line and wireless calls, said Earl W. Comstock, president of the Competitive Telecommunications Assn., a trade group representing companies that lease the regional carriers’ lines to serve their own customers. AT&T “will be able to raise prices for rivals in the wireless and business marketplaces absent new regulatory restraints, and those costs will be passed on to consumers,” Comstock said.

Recent DailyWireless articles include; AT&T/BellSouth Merger Close? and FCC Encourages Cable Alternative.

Year in Review Review

We’ve (practically) made it through another year. Pretty interesting, wasn’t it!

DailyWireless is working on our own Year in Review, but we checked out other recaps of 2006 (to steal some ideas). Here are a few other 2006 recaps:

Time for a toast. We’ll get back to our own review later. Perhaps the biggest story of 2006 happened just minutes ago — the $86 Billion merger of AT&T and BellSouth.

New Smartphones from HTC

Engadet says HTC’s 2007 arsenal is shaping up to be a doozy.

According to PDA 24/7 the “Kaiser” (pictured top left), a follow-on to the Hermes that adds GPS — a feature that’s becoming increasingly common in high-end Pocket PCs.

The “Elf” (top right) and “Panda” (not pictured) are midrange devices; they’ll lack 3G radios, but the Panda’s claim to fame will be a giant QVGA display that weighs in at well over 3 inches, while the Elf makes a name for itself with a fashion-friendly design and a touchpad in place of the typical d-pad. The “Wings” (bottom left) will ultimately take the torch from the Vox — yes, the still-unreleased Vox — by adding 3G, GPS, and a beefier processor.

Finally, a new clamshell Smartphone will pick up where the Star Trek left off, rocking a GPS receiver and more wireless radios than its predecessor.

Meanwhile, E-TEN’s M700 Pocket PC could be a HTC killer with WiFi, GPS, and a slide-out QWERTY keyboard. It recently passed by FCC inspection with Windows Mobile 5.0, quad-band GSM/GPRS/EDGE, Bluetooth 2.0, 802.11b/g WiFi and a SiRFStar III GPS chipset.

Italy Opens 3.5 GHz for WiMAX

The Italian government has announced that it is opening the 3.5 GHz spectrum for WiMAX and will offer licenses for the band sometime in the first half of 2007, according to Reuters. To make space for the new technology, Italy has reassigned 3.4-3.6GHz from military use.

The move is expected to pull in a 100-200 million euros, far from Europe’s past auctions for 3G cellular technology or recent US auctions of cellular spectrum. It will be up to Italy’s telecoms regulator AGCom to decide by February how it intends to distribute the frequencies. Tiscali and broadband provider Fastweb have successfully tested WiMAX technology.

Companies like Clearwire and Sprint are using the 2.5-2.7 GHz band to deploy WiMAX in the US. Clearwire has international aspirations with Intel and Motorola major investors.

The WiMAX Forum’s Spectrum and Regulatory Database has been completed. The database represents a worldwide effort by the forum to compile frequency availability, spectrum licensing, and regulatory information for the 2.3, 2.5, 3.5, 3.7 and 5.8 GHz frequency bands. It was developed in collaboration with AT4 wireless (formerly CETECOM Spain).

While the 3.5 GHz band is the most popular world-wide, the FCC is still protecting 3.5 GHz for attack radar in the United States.

Attack what? The 3.5 GHz band is the “WiMAX band” in the rest of the world. Besides, UAV links at 3.5 GHz may save more lives.

The FCC did open a small license-free band at 3.65 GHz. However, the contention protocol defined for the band (designed to mitigate interference) could be incompatible with the standard WiMAX protocol.

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Perhaps U.S. policy makers will come around in 2007 and embrace the inevitable.

Cellular operators like Verizon and Cingular need cost-effective backhaul for their cell sites which now need more capacity thanks to HSDPA and EVDO data services. WiMAX at 3.5 GHz may be the most cost/effective solution.

Watch the NTIA and FCC get religion for a “competitive environment” in 2007.

AT&T/BellSouth Merger Close?

AT&T Inc. has offered a new set of concessions that are expected to satisfy the two Democrats on the Federal Communications Commission and lead to approval of the company’s $85 billion buyout of BellSouth Corp., possibly as soon as Friday, reports the Associated Press.

AT&T filed a letter of commitment with the agency Thursday night that adds a number of new conditions to the deal, including a promise to observe “network neutrality” principles, an offer of affordable stand-alone digital subscriber line service and a divestment of some spectrum. Final approval still requires a vote of the commissioners, which can happen at any time via computer. The proposed deal is the largest telecommunications merger in U.S. history.

AT&T offered the concessions after a little more than a week of negotiations with lawyers who work for the two Democrats on the commission, Michael Copps and Jonathan Adelstein, documents show.

The concessions include:

  • Selling some wireless spectrum and, in other cases, agreeing to use spectrum or
  • Offering high-speed Internet service to customers without requiring them to buy phone service, at a cost of $19.95 per month.
  • Returning 3,000 jobs to the United States that BellSouth had outsourced overseas;
  • Freezing prices on some services that rivals purchase from AT&T to resell;
  • Selling, or divesting, fiber lines in 31 buildings in the Southeast so others can use them to compete with AT&T;

According to Telephony Magazine, AT&T pledged they would assign and/or transfer all of their 2.5 GHz spectrum to an unaffiliated third party. In a related commitment, AT&T said it would continue to build out broadband coverage for its 2.3 GHz wireless licenses currently owned by BellSouth, with the goal of having coverage of 25% of the population in its service areas by July 2010.

Consumer advocates praised the compromise.

Gene Kimmelman, vice president of federal and international affairs for Consumers Union, who has worked closely with the Democrats, said AT&T’s new concessions are “an enormous improvement from where we were a month ago.”

Ben Scott, legislative director for Free Press, a reform group that has fought the merger, said the network neutrality provision was a “big step forward for the supporters of an open Internet.”

The agreement came together 10 days after Republican Commissioner Robert McDowell announced he would not vote on the deal, despite being authorized to do so by the FCC’s general counsel.