Competitors Urge FCC to Reject SBC-AT&T Merger
CompTel urged the FCC on Mon. to “simply deny” requests to approve the SBC-AT&T merger and not try to “mitigate the many public interest harms… through toothless merger conditions.” In comments to the FCC, CompTel said the proposed merger is little more than an attempt by SBC “to swallow [its] largest rival” after “leveraging its local monopoly” to bring AT&T “to its knees.”
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The Bells are still “classic monopolists” controlling “bottleneck ‘last-mile’ links to virtually every customer, CompTel said. With the elimination of UNE-P, line sharing and other requirements, the FCC keeps making it harder for other companies to compete with the Bells, CompTel’s filing said. CompTel Acting CEO Drew Clark said during a news conference of merger critics the group organized FCC approval is widely assumed. But that’s not a given, Clark said.
Heather Gold, senior vp of XO Communications, a CompTel member, said the merger’s most significant impact would be on local competition, though SBC has said it mainly involves the acquisition of long distance services. Without AT&T’s installations, the number of buildings in Cleveland with competitive providers goes down 53%, she said. In Milwaukee, the competitive presence drops 64%, she said. She also complained that the SBC merger application lacked pertinent data about competitive issues and called the application “100 pages of fluff.” The FCC and Dept. of Justice have asked for more information that will help competitors and reviewing agencies get a better idea of the merger’s competitive impact, she said.
Brian Moir, counsel for the eCommerce & Telecom Users Group (eTUG) which represents large business users, said his members don’t oppose the merger. They think the deal will be approved, so it’s better to work on resolving problems business users have with availability and price of special access, he said at the news conference. “Mergers don’t change the problems we have today,” said Moir. “When you get to the largest users ironically there is even less choice” among providers and alternatives such as wireless and cable “are irrelevant for large businesses with high data transmission needs.”
NASUCA’s filing urged the FCC to consider the 2 big telecom mergers -- SBC-AT&T and Verizon-MCI -- in a combined proceeding: “Taken together, these 2 mergers would result in the elimination of competition far greater than for each merger taken individually. The Commission must consider the interrelationship of these mergers.” NASUCA Exec. Dir. Charles Acquard also attended the CompTel news conference. Like the others, NASUCA’s comments to the FCC raised concerns about the SBC-AT&T merger on consumers but said the problems might be solved by attaching “definitive and enforceable conditions.” The filing said such conditions would have to: (1) Promote competition in the local, broadband and long distance markets for residential and small businesses customers. (2) Protect such customers from declines in service quality and other “negative impacts.” NASUCA told the FCC: “Given that this merger is qualitatively and quantitatively different -- more likely prejudicial to consumers -- from mergers previously considered by the Commission, the conditions need to be more substantial and more effectively enforceable than the conditions previously adopted.”
Although they weren’t represented at the news conference, the Consumer Federation of America, Consumers Union and the U.S. Public Interest Research Group (U.S. PIRG) urged the FCC to deny both the SBC-AT&T and Verizon- MCI mergers. The groups said in an April 22 petition to deny: “The proposed mergers of dominant Bell operating companies and their largest wireline telephone competitors… will have profoundly anticompetitive effects across the full range of product and geographic markets.”
CWA said the merger should be approved because it would create a “financially stable, global leader.” CWA said the merger would be a plus for national security because it would ensure that AT&T, “on which the government heavily depends,” remains a strong “American company.” It also would give employees at both companies “the opportunity to share in the growth of the merged entity rather than the job loss that has been the fate of too many AT&T employees in recent years.”
An SBC spokesman said the company is “confident” the FCC will approve the merger because it will benefit customers and the economy “through increased innovation, competition and investment.” In response to competitors’ concerns, he said the business market is “healthy,” with a variety of competitors such as ILECs, Sprint, systems integrators such as EDS and IBM and fiber networks such as Level 3 and Broadwing.