Curbs sought on AT&T, BellSouth merger

September 26, 2006|By Cox News Service

Consumer advocates and civil libertarians demanded yesterday that regulators refrain from approving AT&T Inc.'s purchase of BellSouth Corp. unless the phone companies accept tough restrictions on their $67 billion deal.

Last week, Federal Communications Commission Chairman Kevin J. Martin recommended that the merger be approved, perhaps as soon as the FCC's regular meeting Oct. 12, according to published reports based on unidentified agency sources. Such approval would be unusual, because the Justice Department has not completed its review of the proposed merger's impact on consumers and competition.

While the two phone companies want the FCC to move quickly, consumer groups say regulators should not rush to sign off on a combination that could affect consumers for decades.

"This merger will haunt the consumer," Mark Cooper, research director at the Consumers Federation of America, said.

The merger would allow Texas-based AT&T to extend its reach across the South to control nearly half the nation's phone lines, spreading over 22 states. It also would gain full control of Cingular Wireless, the nation's largest wireless service provider.

Consumer groups belonging to the Competition Coalition called on regulators to impose restrictions on the new telecom giant.

For example, they want AT&T to accept rules guaranteeing "net neutrality," meaning the company would have to treat all Internet content in a neutral way.

AT&T has expressed interest in charging content providers for speedy delivery of enhanced services.

Consumer groups say that forcing Internet companies to pay "tolls" for premium delivery of their content would hurt young companies trying to compete against established giants.

"AT&T's approach to the Internet is one which does not bode well for maintaining the Internet as an avenue of innovation, an avenue of free expression, an avenue of political speech," said Andrew Schwartzman, president of the Media Access Project.

Martin supports the White House's position that tough net neutrality protections are unnecessary for telecom companies.

The consumer groups also said that regulators should insist the companies divest themselves of unused airwaves so that potential competitors could use them.

The American Civil Liberties Union also is trying to reshape the proposed merger.

Barry Steinhardt, director of the ACLU's Technology and Liberty Program, said the FCC should be investigating the phone companies' possible involvement with the National Security Agency, which conducts surveillance of potential terrorist activities.

"We believe the FCC has both a statutory and a public interest obligation to investigate whether or not AT&T and BellSouth have been engaging in illegal cooperation with the NSA and spying on Americans," Steinhardt said.

While Martin may be pushing for quick and unconditional approval of the merger, other FCC commissioners reportedly plan to include some of the conditions consumer groups want.

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