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AT&T Offers Concessions To FCC In BellSouth Bid

Members of the Federal Communications Commission have stalled the merger, seeking additional consumer safeguards.

W. David Gardner

October 16, 2006

2 Min Read

The pending merger of AT&T Inc. and BellSouth Corp. has been placed on hold for a few more days after the two Democratic members of the FCC requested additional consumer safeguards.

Chairman Kevin Martin has scheduled an open meeting of the FCC for Nov. 3 when the commission will review concessions outlined by AT&T. In a letter to the FCC dated Oct. 13, the proposed merged corporation said it plans to offer broadband Internet access at speeds in access of 200 kbps to all of the residences in its territory.

However, the merged firm's position on the matter of "net neutrality" issue wasn't spelled out, leaving that issue in limbo.

The Department of Justice approved the merger last week, leaving FCC approval as the final major hurdle facing the merger, which would piece together major pieces of the old Ma Bell AT&T network that was broken up on antitrust grounds more than two decades ago.

In its letter to the FCC, AT&T said also that it will provide a free ADSL modem to residential subscribers who replace their dial-up service with high-speed ADSL broadband service.

AT&T said it is seeking unanimous approval of the merger by the FCC commissioners. The commission is evenly split on the merger politically with Chairman Martin and Deborah Taylor Tate, the other Republican, trying to work out an agreement with the two FCC Democrats -- Michael Copps and Jonathan Adelstein. The fifth member, Robert McDowell, a Republican, is sitting out the deliberations because of conflict-of-interest status.

In its letter last week, AT&T extended an olive branch to the Democrats, saying: " in the interest of facilitating the speediest possible approval of the merger by the Commission, we would not object to the imposition of certain merger conditions previously proposed by certain parties in this proceeding and requested by the Democratic Commissioners, in order to obtain expeditious approval of the merger."

The merger would create the largest telecommunications comapny in the U.S. The so-called Baby Bells -- the regional Bell operating companies of the original AT&T-- have been merging and consolidating since the original breakup. Like AT&T, Verizon Communications has been cobbled together with different regional telcos. Qwest Communications International is a much smaller former Baby Bell, and it stands alone.

Martin said the Nov. 3 meeting will consider the merger "to the extent that the Commission has not completed its review of this transaction before then."

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