Senate Commerce Calls to ‘Review’ AT&T-BellSouth Deal
The Senate Commerce Committee will review the $89.4 billion AT&T-BellSouth merger, according to a statement released Mon. from the committee. Chmn. Stevens (R-Alaska) and committee staff will examine the merger during coming weeks, “a process which will include meetings with involved parties,” the statement said. Several Hill sources said the committee’s March 15 hearing on competition and convergence could be a forum for reviewing the buyout.
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“The proposed recombination of 2 of the remaining 4 Baby Bells will call into question our commitment to promote competition in the communications marketplace,” said Senate Commerce Committee Co-Chmn. Inouye (D-Hawaii). “Coming only 125 days after the FCC’s approval of the SBC-ATT merger, AT&T’s proposal to purchase BellSouth would remove yet another potential competitor from the communications marketplace,” Inouye said. The deal will require an “exacting review” by federal regulators and Congress to protect the public interest and preserve the benefits of competition, he said.
The Senate Judiciary Antitrust Subcommittee will hold hearings on the merger, according to a statement from Chmn. DeWine (R-Ohio) and Ranking Member Kohl (D-Wis.). “A key question will be, simply, is bigger going to be better for consumers,” they said: “We need to see whether the increased size of the new AT&T will bring consumer benefits, or harm competition. We need to see.”
“This merger proposal is one that unquestionably merits the utmost scrutiny by government antitrust officials,” said House Telecom Subcommittee Ranking Member Markey (D-Mass.). “Twenty years after the government broke up Ma Bell, this deal represents a mother and child reunion,” Markey said, urging lawmakers to undertake a thorough review of the merger proposal to assess its impact on consumers and competition. Congress needs to ensure that telecom markets are “vigorously competitive and open to innovation,” he said.
The House Commerce Committee had no press statement Mon., and many Hill offices said they weren’t prepared to issue statements, having just learned of the weekend development. But several Hill sources said the merger already is raising alarm bells and could affect telecom negotiations. While the recent SBC-AT&T and Verizon-MCI mergers caused only a ripple on the Hill, those deals involved long-distance companies where mergers essentially made sense, Hill sources said. This deal is different, they said. “BellSouth is much stronger and capable of going out on its own and competing, where the long distance industries were sick industries,” said one Hill source. He and others interviewed said there will be a push for hearings to examine the potential impact on consumers and competition in the industry.
“I hate to say it, but poor Judge Greene is probably spinning in his grave,” said Thomas Bliley, former chmn. of the House Commerce Committee and one of the authors of the 1996 Telecom Act. It took nearly a decade to get competition after the breakup of AT&T, Bliley said. “Well, it’s Groundhog Day. We can only hope that Congress, the Justice Dept. and the FCC are going to look out for America’s business and residential consumers,” saying he has serious reservations about the proposed merger.
NCTA weighed in not to “question the merger,” but to suggest how “extraordinary” it is for an industry to ask “not only special favors from Congress but in fact demand free license to enter the video market while maintaining all current regulation on a much smaller cable industry,” according to a letter that NCTA Pres. Kyle McSlarrow sent Mon. to the leaders of the House and Senate Commerce Committees. AT&T’s market capitalization is greater than that of the “entire cable industry,” said McSlarrow’s letter. “This attempt by the Bells to short-circuit reform… is ridiculous on its face,” the letter said.