A group of competitive telecommunications service providers Tuesday said they have urged the FCC to deny the proposed merger of AT&T and BellSouth.
In comments filed to the FCC, the companies said that approval of the deal will only offer the new AT&T more power to thwart competition. The deal would also significantly reduce competition in the market because AT&T and BellSouth are currently the most significant competitors to each other, said the companies, including XO Communications, Talk America Holdings and NuVox Communications.
They warned that the deal will increase AT&T’s incentive and ability to discriminate against competing service providers that rely on AT&T’s local networks to offer service to customers.
The companies said that AT&T is essentially trying to re-establish its nationwide monopoly. AT&T was once the former government-regulated monopoly in the U.S. The company was famously split into seven regional service providers during the 1980s, with AT&T left with the ability to offer long-distance services. Since then, consolidation, including the proposed AT&T and BellSouth merger, will have whittled that number down to three phone companies that also own local lines in the U.S.
If the FCC allows the merger, the group of competitive service providers asked that the FCC impose and enforce conditions that could offset the potential downsides of the merger. The companies suggested that the FCC require the new AT&T to continue to sell access to the AT&T and BellSouth networks at current prices and to continue to sell wholesale access to AT&T private line services in BellSouth territory at current rates.
The companies also suggested that the FCC require AT&T to sell off its metropolitan network assets that are in BellSouth territory and sell off BellSouth’s wireless assets, including its 2.5 GHz licenses. BellSouth and another company, Clearwire Corp., own essentially all of the 2.5 GHz licenses in the U.S. The spectrum is ideal for broadband wireless services, although BellSouth hasn’t widely deployed such services using the licenses.
The merger of AT&T and BellSouth was announced in March and is valued at $67 billion. The deal requires FCC approval before it becomes final.
Other service providers that signed on to the FCC filing include Cbeyond, Grande Communications Networks, Supra Telecommunications and Information Systems and Xspedius Communications.
