AT&T Merger Conditions Meet Criticism
Conditions proposed by AT&T and BellSouth in a bid for FCC merger approval got a mixed review Mon., now that parties have had time to study the late-filed FCC public notice (WID Oct 16 p5). The agency late Fri. decided not to vote on the merger so public comment could be solicited on the proposed conditions. The FCC called for comments by Oct. 24 on an AT&T list of proposed conditions that was submitted as an ex parte filing.
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Most of the proposals are versions of conditions attached to last year’s SBC-AT&T merger, and the few new conditions aren’t very strong, critics argued. “There’s a comparably small charitable donation, a promise to provide new DSL customers with a promotional offering and some wireless trials,” said a competitive industry source. In addition, the companies in essence added a few more months to commitments made last year, he said.
What’s new, according to AT&T officials: (1) $10 a month broadband service at speeds up to 768 kbps to new in- region customers. (2) A promise to provide broadband service to 100% of residents living in the AT&T and BellSouth territories, mainly using DSL but also some alternative technologies such as satellite and WiMAX fixed wireless. (3) Free DSL modems to subscribers who replace their dial-up service with DSL and sign up for 12 or more months. (4) A $1 million grant to promote public safety. (5) Ten trials of wireless broadband Internet access using 2.3 GHz or 2.5 GHz spectrum.
The promise to offer wireless trials is far from what many opponents sought, said Media Access Project Pres. Andrew Schwartzman. “We argued for a divestiture requirement so the technology would be available to broadband competitors,” he said. AT&T’s commitment is reminiscent of a condition in last year’s Sprint Nextel merger. The FCC decided not to order Sprint and Nextel to divest the 2.5 GHz spectrum each owned before their merger, though they were the 2 largest holders of the spectrum. Instead, the 2 committed to offer services on the spectrum. Comr. Adelstein, concerned about rural areas that don'’t have broadband services, had made a buildout commitment a key to his support of the merger.
The companies’ stance on net neutrality was missing from the list of conditions submitted Fri. An updated list Mon. said they agreed to the same net neutrality condition that was approved by the FCC as part of the SBC-AT&T merger, meaning they will abide by the FCC’s 4 net neutrality principles. That wasn’t enough for most net neutrality advocates. “The 4 principles were inadequate for the other merger and they're inadequate for this merger,” said Art Brodsky, Public Knowledge communications dir. Public Knowledge sought a 5th principle to protect applications providers against discrimination by carriers, he said.
An AT&T spokesman called the conditions “good, proconsumer” measures. The company still doesn’t think conditions needed, since 18 state commissions and 3 foreign countries have approved the transaction without imposing any conditions, he said. But the company has made the offers in response to FCC requests, and to get speedy approval, he said.
The FCC’s delay in approving a measure already cleared by DoJ is an example of problems in how mergers are approved in the U.S., ex-FCC Comr. Harold Furchtgott-Roth said: “In a rational world of governmental merger review, the decision of the DoJ or the Federal Trade Commission on matters of competition and consumer protection would be final.” The 2- part federal approval creates “puzzling” results, he said: “The merger review process at the FCC has become an exercise in creating company-specific rules… Communications law in America is now codified in dozens of different company- specific exceptions reflecting past merger conditions.”