AT&T/BellSouth Merger Close?

Posted by Sam Churchill on

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.

Posted by Sam Churchill on Thursday, December 28th, 2006 at 5:24 pm .

Leave a Reply