AT&T/BellSouth Merger Approved

Posted by Sam Churchill on

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.

Posted by Sam Churchill on Friday, December 29th, 2006 at 1:58 pm .

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