Monday, March 06, 2006

AT&T, BellSouth Tout Competition and then Announce Merger

On March 1, 2006, both AT&T and BellSouth submitted their comments to the FCC's rulemaking proceeding concerning consumer protection for broadband customers. As in the earlier round of comments, both companies opposed broadband consumer protection regulations because, they said, the competition would prevent any need for the protection. (I submitted comments on the same day in favor of consumer protection regulations).

AT&T commented that "In light of this robust, head-to-head competition, the Commission should stand firmly by its well-established policy of letting 'the marketplace, not the government, pick the winners and losers among new services.'"

BellSouth commented that "The BIA [Broadband Internet Access] services market is competitive; it adequately protects consumers from the concerns contemplated in the Notice [Notice of Proposed Rulemaking]".

Four days after the two companies told the FCC about robust competition, they announced their intent to merge. This merger would create a massive telecommunications company that would supply long distance, local telephone, cell phone, and broadband wireless (DSL) service. Cingular Wireless, which will be part of the new company, had recently acquired the wireless business of AT&T.

Not only will the new company be the largest provider of broadband Internet service and the largest cell phone carrier, it will provide nearly half of all telephone lines.

Will we still have "robust, head-to-head competition"?

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