Get the skinny on AT&T’s 20-page concession document, which helped seal the BellSouth deal
AT&T filed a 20-page document with the FCC in late December that offered a number of concessions aimed at helping finalize its $86 billion acquisition of BellSouth.
AT&T filed a 20-page document with the FCC in late December that offered a number of concessions aimed at helping finalize its $86 billion acquisition of BellSouth.
It’s not easy to make heads or tails of FCC documents, let alone one that covers subjects such as unbundled network elements and net neutrality. To read AT&T’s final merger commitments in the carrier’s original language, check out this FCC document. For something more digestible, we’ve captured the gist of AT&T’s compromises. Here are the highlights:
*The concessions that could have the biggest impact on the industry are those regarding net neutrality. AT&T agreed to the principles set forth in the FCC’s September 2005 policy statement. Essentially, this means AT&T is agreeing not to charge content providers a premium to carry or deliver their traffic, nor will the carrier treat packets from or heading toward content providers any differently than other packets on its network. (For details about the net neutrality issue, check out our related story.
*AT&T says it will not raise prices on its dedicated T-1 and T-3 local private line services for two years in BellSouth’s territory.
*The carrier will file one or more interstate tariffs involving T-1, T-3 and Ethernet service pricing that includes “reasonable volume and term discounts without minimum annual revenue commitments or growth discounts.” In other words, AT&T will offer better pricing for customers without requiring users spend more money with the carrier to get the improved pricing.
*By year-end 2008, AT&T will bring back 3,000 jobs to the United States, which BellSouth had filled outside the country. At least 200 of those jobs will be based in New Orleans.
*AT&T will offer broadband (above 200Kbps) Internet access service to 100% of the carrier’s in-region territories — meaning all residents within legacy SBC and BellSouth territories. The carrier will fulfill this promise through wireline and wireless service including offerings based on satellite and Wi-MAX technologies.
*The carrier is offering DSL modems to customers that replace their AT&T or BellSouth dial-up service with DSL service between July 1, 2007, and June 30, 2008. Customers have to commit to at least a 12-month contract and will have to pay the shipping and handling fee for the modem.
*Within six months and for 30 months after, AT&T will offer a 768Kbps DSL service to new customers for $10 per month.
*Customers in the traditional BellSouth territory can expect AT&T to this year offer DSL service to customers that aren’t using its voice services. The carrier says this offering will be available for at least 30 months.
*AT&T will offer video programming services to 1.5 million homes in BellSouth’s territory by year-end 2007. The carrier also commits to providing the FCC with a written report on its progress in this area by Dec. 31.
*AT&T will implement disaster recovery and restoration capabilities to all facilities in BellSouth’s territory by June 1. The carrier also will donate $1 million to a “section 501(c)(3) foundation or public entities for the purpose of promoting public safety.”
*AT&T will provide the FCC with a report detailing its efforts to offer “high-quality service to customers with disabilies,” within a year of the merger close date.
*The service provider agreed not to increase its unbundled network element (UNE) pricing post merger and to let competitive carriers use “pre-existing interconnection agreement(s)” as a staring point to strike new contracts with the combined AT&T/BellSouth. The carrier also says it will not terminate any competitive carrier’s contract over the next three years within the traditional BellSouth 22-state region unless the customer requests contract termination.
*The carrier commits to maintain a “similar” number of settlement-free Internet peering agreements with other ISPs. The number would decrease only due to fewer ISPs resulting in mergers, acquisitions or ISPs exiting the market due to bankruptcies. AT&T also says it will post its peering policies on its public Web site and maintain that posting for three years post-merger.
*BellSouth has wireless broadband spectrum in the 2.5GHz spectrum band. AT&T says it will transfer the ownership of that spectrum to a third party within the next 12 months.
*AT&T will divest some fiber assets in the BellSouth territories.
