Comment on FCC Decision to Delay Approval of AT&T-BellSouth Merger

Published October 13, 2006

(October 13, 2006 – Chicago, Illinois) The FCC announced today it will delay making a decision on whether to approve the merger of AT&T and BellSouth. The proposed deal has been controversial throughout the country since its announcement last year. A commission meeting date has been set for November 3, 2006.

The statement below is from Steven Titch, senior fellow for IT and telecom policy at The Heartland Institute and managing editor of IT&T News. You may contact Titch at 281/571-4322 or by email at [email protected]. For more information about The Heartland Institute, don’t hesitate to contact me at 312/377-4000, email [email protected].

“The Federal Communications Commission’s decision to delay approval of the pending merger between AT&T and BellSouth is a setback for consumers who are eagerly awaiting more competition, more choices, and lower prices in the broadband and cable TV marketplace.

“The FCC is alone in its intransigence. The antitrust authorities within the Department of Justice approved the merger, as have all the state public service commissions in BellSouth’s territory.

“The FCC, however, remains deadlocked on whether the acquisition requires deliberately costly ‘concessions,’ such as a prohibition on service bundling that would simply hobble AT&T’s ability to allow consumers to save money by combining phone, cable, and broadband Internet.

“Opponents of the merger cry ‘monopoly’ as if this were 1984, not 2006. But as far as basic phone service goes, both companies are losing millions of customers to wireless and Internet calling. They no longer hold this market captive as they once did. We simply have to look at the number of large national companies who today deliver broadband connections to consumers, which is the direction in which AT&T-BellSouth wants to move. There’s Comcast, Time Warner, EarthLink, MetroFi, Bright House Networks, and WOW, to name just a handful. Google says it wants a piece of this business, too!

“It’s arguable that of all parts of the broadband value chain, the access market right now is the most competitive and the most innovative, with fiber-to-the-home, video over IP, and mesh wireless.

“The FCC needs to see the competitive nature of the current broadband access market clearly and allow a combined AT&T and BellSouth to use its economies of scale and larger service footprint to deliver the benefits of broadband competition to greater numbers of users.”

Steven Titch ([email protected]) is senior fellow for IT and telecom policy at The Heartland Institute and managing editor of IT&T News.