Tuesday, October 10, 2006

DOJ Approves AT&T + BellSouth without Conditions

The U.S. Department of Justice approved the pending acquisition of BellSouth by AT&T without imposing any conditions. The DOJ said the deal would not reduce competition, did not pose a threat to Net Neutrality, and would not harm consumer welfare. Although the Department of Justice required divestitures of certain local private line assets before SBC acquired the former AT&T, the DOJ ruled that in this merger divestitures were unnecessary to preserve competition.

Citing an in-depth review, the DOJ said the combination would not significantly increase concentration in the ownership of spectrum in any geographic area or give AT&T control over a large enough share of all spectrum suitable for wireless broadband services to raise competitive concerns.

Regarding competitive problems in Internet services, including "net neutrality" concerns regarding the merged firm's ability or incentive to favor its own Internet content over that of its rivals, the DOJ ruled that the merger would neither significantly increase concentration in markets for the provision of broadband services to end users nor increase Internet backbone shares significantly. Although the merger would increase the number of subscribers on AT&T's broadband network, the large majority of the nation's residential and small business "eyeballs" remain with other large broadband Internet service providers (such as Verizon, Qwest, Comcast, and Time Warner).

"After thoroughly investigating AT&T's proposed acquisition of BellSouth, the Antitrust Division determined that the proposed transaction is not likely to reduce competition substantially... The presence of other competitors, changing regulatory requirements and the emergence of new technologies in markets for residential local and long distance service indicate that this transaction is not likely to harm consumer welfare."http://www.usdoj.gov