att/bellsouth merger approved

[David Farber <dave () farber net>]

Begin forwarded message:

From: Lynn <lynn () ecgincc com>
Date: December 29, 2006 6:51:07 PM EST
To: dave () farber net
Subject: att/bellsouth merger approved

http://www.fcc.gov/

FCC APPROVES MERGER OF AT&T INC. AND
BELLSOUTH CORPORATION
Significant Public Interest Benefits Likely to Result
Washington, D.C. – The Federal Communications Commission today  
approved the
merger of AT&T Inc. (AT&T) and BellSouth Corp. (BellSouth).
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.
Docket No.: 06-74

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