AT&T is free to complete its acquisition of BellSouth., the U.S. Department of Justice said Wednesday, ruling the deal won’t reduce competition in the telecom marketplace.
AT&T is free to complete its acquisition of BellSouth, the U.S. Department of Justice said Wednesday, ruling the deal won’t reduce competition in the telecom marketplace.
While the decision is still open to review by the Federal Communications Commission, the announcement clears a major hurdle for the $67 billion purchase.
Both members of the U.S. Congress and rival phone carriers have pleaded with government regulators to block the deal, fearing that it would thwart competition. Telephony providers signing a recent petition to the FCC included XO Communications, Talk America Holdings and NuVox Communication.
The combined companies would cover a significant portion of the United States. Just as SBC expanded its western and southwestern regional phone network when it acquired AT&T’s nationwide long-distance services along with the AT&T name in 2005, AT&T would add southeastern regional phone service with the proposed BellSouth deal.
However, Justice Department lawyers said that neither AT&T or BellSouth would have to sell off any networks, as regulators had required before approving SBC’s bid for AT&T.
The Justice Department’s antitrust division had investigated the deal’s impact on future competition for wireless broadband services, as well as the areas where the two companies currently compete, including residential local and long-distance service, business telecom and Internet services.
Investigators found that consumers’ welfare would not be harmed by the proposed buyout, because of the presence of other competitors, changing regulatory requirements and the emergence of new technologies such as VoIP, Assistant Attorney General Thomas Barnett said in a release.
Barnett also said the deal would not affect net neutrality, the concern that a communications provider might favor its own Internet content over a competitor’s. Although the deal will increase the number of subscribers to AT&T’s broadband network, the majority of nationwide Internet users are served by rivals such as Verizon, Qwest Communications International, Comcast and Time Warner, he said.
