The proposed SBC-AT&T and Verizon-MCI mergers may create competit...

also signed by ranking member Kohl (D-Wis.), recommended 4 measures to ensure the market remains competitive: (1) The acquiring companies must sell unbundled DSL service to consumers without requiring purchase of traditional phone service. Bundling can offer consumer and competitive benefits, they said, but mandatory bundling seems likely to diminish competition. Qwest is already offering unbundled DSL and Verizon and SBC have taken steps in that direction. (2) The acquiring companies must commit to nondiscrimination on their networks -- “net neutrality.” This means they may not block or degrade the transmission of competitors’ data packets, in the backbone or the “last mile” connections to consumers’ homes. (3) The acquiring companies must provide full access to 911 and E-911 networks on nondiscriminatory terms. While this condition may require further technology investment, SBC and Verizon already are working toward this goal, they noted. (4) The acquiring companies must divest duplicative local loop facilities from AT&T and MCI, when appropriate. There is some dispute about whether such divestiture would disrupt service, the letter noted, but since it’s an important antitrust remedy for ensuring competition, the issue needs to be explored. The letter chided the FCC for letting languish several critical telecom regulatory issues involved in the mergers: Intercarrier compensation, the regulatory framework for wireline Internet broadband access, pricing of unbundled network elements and pricing for special access services. “The entire industry is suffering due to the ongoing uncertainty caused by these delays,” the letter said. It would be preferable to formulate broader policy regarding mergers instead of imposing conditions on specific companies, the letter said, but this situation requires action because of the size of the deals. “Sometimes merging parties, when their actions fundamentally reshape a market, must accept restraints that are not immediately shared by the rest of the industry,” it said.