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Diverse Groups Urge the FCC to Oppose the AT&T/BellSouth Merger
Posted: 06-Jun-2006 [Source: Consumer Federation of America]

[Consumer groups and antitrust law experts continue to raise concerns about the pending merger between BellSouth and AT&T. ]

Washington -- Today, representatives from national consumer groups, state consumer advocates, and antitrust law experts held a press conference call to discuss new activities and strategies related to their opposition to the pending merger between BellSouth and AT&T. Opposition to the merger is mounting at several state public utility commissions and at the Federal Communications Commission (FCC).

If approved, this merger will create the largest telecommunications monopoly in the country, controlling almost half of the nation's telephone lines. It will also be the nation's largest wireless company, the largest broadband company, the largest long distance company, the largest VoIP company, and will control the largest collection of wireless spectrum that had been intended for the creation of alternative networks. This is the latest in AT&T's efforts to recreate the old Bell monopoly telephone company that was dismantled by President Ronald Reagan in 1984. AT&T has already succeeded in swallowing Pacific Telesis, Ameritech, SNET, SBC and the former AT&T Wireless.

"This merger gives AT&T more leverage to play its anticompetitive dirty tricks. It will use its market power to raise consumer prices and slow the flow of innovation," said Mark Cooper, Director of Research at the Consumer Federation of America.

"As a result of a concatenation of events -- many of them Commission- initiated -- the competitive environment that was anticipated and nourished in the SBC/Ameritech and Bell Atlantic/GTE mergers has been choked almost out of existence. Then the SBC/AT&T and Verizon/MCI mergers further limited competition. Now we are left with complements like wireless and voice over Internet protocol that are supposed to represent so-called 'intermodal' alternatives, yet in which the mega-corporations have a large stake," said Charlie Acquard, Executive Director of NASUCA.

The merger will also cost jobs. AT&T and BellSouth "anticipate the loss of 10,000 jobs" after the merger and predict that "half of the $13.9 billion" in merger savings will come from "headcount reductions." This is why the Bells' largest union, Communications Workers of America, has opposed the merger in several states.

"Now that AT&T's Ed Whitacre has made it plain that his business model is based on creating a tiered Internet, in considering this merger the FCC has more reason than ever to impose for strong and permanent protections for Network Neutrality," said Andrew Schwartzman, President and CEO of the Media Access Project.

"The proposed merger of AT&T and BellSouth would be disastrous for the communications market and would subject end-users to fewer choices and higher prices for any services that rely on high-capacity transmission as an input, including high-bandwidth business and wireless services," said Jonathan Lee, Senior Vice President of COMPTEL.

The merger will also harm national security and disaster preparedness by eliminating redundant telecommunications network capabilities. It will further threaten consumer privacy by creating a single massive database under AT&T's control containing the phone records of customers of the largest telephone and wireless monopoly in the country, creating risks of further unlawful disclosure of private information. The ACLU has opposed the AT&T/BellSouth merger on these grounds.

Speaking about its anti-merger grassroots campaign that has already prompted over 15,000 consumer letters to the FCC and thousands more individual oppositions at the U.S. Department of Justice, Craig Aaron, Communications Director at Free Press, said: "These tens of thousands of people are simply saying that enough is enough. These companies are big enough, they already have enough power. And these citizens, with millions of more Americans across the country like them, are saying they're tired of higher prices, they're tired of lousy service, they're tired of having fewer choices, no innovation, no competition, they're saying its time to stop the merger mania. We weren't too crazy about Ma Bell's show the first time, the sequel is looking even worse."

"AT&T has a history of anticompetitive conduct. Moreover, three dominant, geographically separated, vertically integrated telecommunications conglomerates is not an optimal industrial structure for the U.S. market. To the extent that the proposed transaction does not involve the loss of a competitor in any local exchange market, the applicants will be rewarded for failing to meaningfully compete during the ten years since the enactment of the pro-competitive Telecommunications Act of 1996," concluded Jonathan Rubin, Senior Research Fellow at the American Antitrust Institute.

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