Monday, June 5, 2006

Competitors Lobby FCC to Deny AT&T-BellSouth Merger

A group of competitive telecommunications companies have filed comments urging the Federal Communications Commission (FCC) to deny the merger of AT&T and BellSouth, citing the irreparable harms to competition and the public interest. The companies that filed the comments are Cbeyond Communications, Grande Communications, NuVox Communications, Supra Telecom, Talk America, XO Communications and Xspedius Communications.

The group outlined three overall areas where they believe the merger would cause harm:

  • Eliminating Existing and Future Competition between RBOCs. As adjacent RBOCs, AT&T and BellSouth are the most significant current and potential competitors to one another in the consumer and business telecom services markets. Both companies have significant network assets in each other's regions.

  • Undermining the Implementation of the Telecommunications Act of 1996. The AT&T and BellSouth merger will undermine the ability of regulators and competitors to implement the pro-competitive, deregulatory framework for local telecommunications that was adopted by Congress in the Telecommunications Act of 1996.

  • Increased Incentive to Discriminate Against Competitive Providers. By extending its monopoly control over local network facilities in BellSouth's territory, AT&T will have an increased incentive and ability to discriminate against competing service providers in retail markets that depend on access to AT&T's local network facilities in order to provide service.

"We have been down this road before of failed promises following previous Bell to Bell mergers, like those of SBC and Ameritech," said Heather Gold, senior vice president of government relations at XO Communications. "The conditions on this merger must have strong enforcement mechanisms with severe penalties if they are not followed. The function of regulatory agencies is to enforce its policies, not to rubber stamp industry actions which thwart those policies."

If the merger is to be approved, then the group is asking that several conditions be imposed, including:

  • Ensure continued access to existing AT&T/BellSouth "section 251" unbundled network elements at rates capped at current levels;

  • Require AT&T/BellSouth to file with states just and reasonable rates for "section 271" network elements;

  • Ensure continued access to AT&T/BellSouth special access services at rates capped at current levels and on a non-discriminatory basis and with a "fresh look" period to permit customers to change providers without incurring penalties;

  • Continue to offer AT&T's wholesale private line services at current rates in BellSouth territory;

  • Provide access to copper loops decommissioned by AT&T/BellSouth;

  • Eliminate eligibility criteria on EEL UNEs; and

  • Divestiture of AT&T's metropolitan network assets in BellSouth territory and BellSouth's wireless assets, including licenses in the 2.5 GHz range.

See also