USA Today, October 16, 2006
By Paul Davidson

Consumer advocates say the new concessions AT&T has offered to close its $80 billion merger with BellSouth don't go far enough to preserve competition.

"They're a step in the right direction, but they don't resolve the most important competitive problems," says Gene Kimmelman of Consumers Union.

He also said AT&T's offer smacks of desperation to win approval.

At the urging of its two Democratic commissioners, the Federal Communications Commission postponed Friday's scheduled vote on the merger until Nov. 3 to allow time for the public to comment on proposed concessions that AT&T filed Friday. The four commissioners available to vote on the merger are split 2-2 along party lines.

AT&T's offer, an attempt to break the stalemate, includes a $10-a-month DSL broadband service for new customers for 30 months. The company also said it would also offer free DSL modems for new broadband subscribers next year.

AT&T's proposal followed a flurry of late-night negotiations Thursday with the FCC's two Democratic commissioners, Michael Copps and Jonathan Adelstein. Republican FCC Chairman Kevin Martin has recommended the merger's approval with no conditions. Democratic commissioners Friday indicated AT&T's offer represented progress.

The Justice Department last week cleared the deal with no conditions or divestitures, enraging Democrats, who vowed to press for significant requirements.

The largest-ever telecom deal would forge a giant with 67 million phone lines and 57 million customers of Cingular Wireless, now jointly owned by AT&T and BellSouth. Consumers Union and others say the behemoth could crush rivals, and the deal means AT&T and BellSouth won't compete with each other. AT&T has said it faces new competition from cable companies.

AT&T also proposed to:

•Provide DSL in 85% of the combined company's 22-state region within two years and offer broadband service through satellite or wireless providers to all the rest.

•Freeze wholesale rates the companies charge rivals to lease their networks for business service. Rivals want lower rates or arbitration to settle pricing disputes.

•Assure it won't block consumers' access to any website. Websites such as Google want to prevent AT&T from offering faster downloads only to those sites that pay higher fees.

•Conduct wireless broadband trials using BellSouth spectrum that is not being used now. The Democrats and consumer advocates want the new company to sell the airwaves to a rival that would challenge the new giant.

Jonathan Lee of Comptel, which represents AT&T rivals, called the proposals "completely inadequate."

AT&T's Michael Balmoris says, "The companies are offering a number of pro-consumer conditions."

This article is copyrighted material, the use of which has not been specifically authorized by the copyright owner. We are making such material available in our efforts to advance understanding of environmental, political, human rights, economic, democracy, scientific, and social justice issues, etc. We believe this constitutes a 'fair use' of any such copyrighted material as provided for in section 107 of the US Copyright Law. In accordance with Title 17 U.S.C. Section 107, the material on this site is distributed without profit to those who have expressed a prior interest in receiving the included information for research and educational purposes. For more information go to: http://www.law.cornell.edu/uscode/17/107.shtml. If you wish to use copyrighted material from this site for purposes of your own that go beyond fair use, you must obtain permission from the copyright owner.