|
NewsGlobe: Today's News
FCC Greenlights AT&T Merger With Bellsouth
Commission Concludes That Significant Public Interest Benefits Are Likely to Result
by Stephen Heiser
The Federal Communications Commission last week approved the merger of AT&T Inc. and BellSouth Corp. The Commission concluded that significant public interest benefits are likely to result from this transaction. Benefits to consumers include:
• Deployment of broadband throughout the entire AT&T-BellSouth in-region territory in 2007.
• Increased competition in the market for advanced pay television services due to AT&T’s ability to deploy Internet Protocol-based video services more quickly than BellSouth could do so absent the merger.
• Improved wireless products, services and reliability due to the efficiencies gained by unified management of Cingular Wireless, which is now a joint venture operated by BellSouth and AT&T.
• Enhanced national security, disaster recovery and government services through the creation of a unified, end-to-end IP-based network capable of providing efficient and secure government communications.
• Better disaster response and preparation from the companies because of unified
operations.
The Commission’s analysis of competitive effects focused on six key groups of services.
They are:
• Special access competition. The record indicates that, in a small number of buildings in the BellSouth in-region territory where AT&T and BellSouth are the only carriers with direct connections, and where entry is unlikely, the merger is likely to have an anticompetitive effect. The Commission found that a commitment by AT&T to divest indefeasible rights of use (IRUs) to those facilities adequately remedied the competitive harm. The Commission further found that the merger was not likely to result in anticompetitive effects with respect to other special access services that combine one carrier’s own facilities with those of another.
• Retail enterprise competition. The Commission found that the merger is not likely to have anticompetitive effects for enterprise customers, even though the applicants currently compete against each other with respect to certain types of enterprise services and some classes of enterprise customers. The Commission found that competition for medium and large enterprise customers should remain strong after the merger because medium and large enterprise customers are sophisticated, high-volume purchasers of communications services and because
there will remain a significant number of carriers competing in the market.
• Mass market voice competition. The Commission concluded that the merger is not likely to have anticompetitive effects in the mass market. The Commission found that neither BellSouth nor AT&T is a significant present or potential participant in this market outside of their respective regions. Consequently, the Commission found that neither party was exerting significant competitive pressure on the other in their respective in-region territories. The Commission further noted that the rapid growth of intermodal competitors – particularly cable telephony providers (whether circuit-switched or Voice over IP (VoIP))– is an increasingly significant competitive force in this market, and anticipates that such competitors likely will play an increasingly important role with respect to future mass market voice competition.
• Mass market Internet competition. The Commission found that the merger is not likely to result in anticompetitive effects for mass market high-speed Internet access services. Specifically, the Commission concluded that the merger caused no horizontal effects for these services because neither BellSouth nor AT&T provides any significant level of Internet access service outside of its respective region. The Commission also concluded that, while the merger may result in some vertical integration, the record did not support commenters’ conclusions that the merged entity will have the incentive to act anticompetitively in the mass market high-speed Internet access services market.
• Internet backbone competition. The Commission concluded that the merger is not likely to result in anticompetitive effects in the Internet backbone market. The Commission found that the merger is not likely to cause the Tier 1 backbone market to tip to monopoly or duopoly, nor is it likely to increase the Applicants’ incentive and/or ability to raise rivals’ costs.
• International competition. The Commission found that the merger is not likely to result in anticompetitive effects for international services provided to mass market, enterprise, or global telecommunications services customers. The Commission also concluded that the merger is not likely to result in anticompetitive effects in the international transport, facilities-based IMTS, or
international private line markets.
• In addition, on December 28, 2006, AT&T made a series of voluntary commitments that are enforceable by the Commission and attached as an Appendix. These conditions are voluntary, enforceable commitments by AT&T but are not general statements of Commission policy and do not alter Commission precedent or bind future Commission policy or rules. Action by the Commission, and effective upon adoption, Friday, December 29, 2006, by Memorandum Opinion and Order. Chairman Martin and Commissioner Tate, with Commissioners Copps and Adelstein concurring, and Commissioner McDowell not participating.
|
