TELECOM Digest OnLine - Sorted: FCC Agrees to Adjusted Merger Conditions AT&T & BellSouth

FCC Agrees to Adjusted Merger Conditions AT&T & BellSouth

Reuters News Wire (
Tue, 27 Mar 2007 19:36:46 -0500

US FCC agrees to changed AT&T/BellSouth condition

Releasing its approval of AT&T Inc.'s BellSouth acquisition, the
U.S. Federal Communications Commission made a merger condition
revision that benefits rivals Verizon Communications west
Communications International Inc.

AT&T is required to offer a reduced rate to other phone companies that
use its networks to connect calls. That means former Bell phone
companies Verizon and Qwest, which use AT&T networks in some U.S.
regions, would also pay the lower rate.

AT&T had previously agreed to cut the rate on the condition that
Verizon and Qwest do the same, incurring the wrath of Verizon and
Qwest and raising questions among some lawmakers.

Since then, AT&T offered to modify the condition, even though it
believes the original is "lawful and fully justified by market

As part of the order, the FCC said AT&T will only have to offer the
reduced rate for 39 months instead of 48 months.

"In order to resolve any lingering controversy over this issue, AT&T
is willing to modify that commitment ... as requested by the
Commission," the company said in comments to the FCC, which agreed to
accept the change.

Stifel Nicolaus analysts noted the order "is modest good news for
Verizon and Qwest, as they will no longer be subjected to the
reciprocity requirement in order to benefit from the AT&T commitment
to cut certain special-access rates.

"AT&T says it will lose a bit more revenue, though it will save some
money as the FCC agreed to shorten the duration of the rate cuts by
nine months," it said in note to clients.

Verizon said the FCC "acted wisely."

"The original formulation discriminated against some carriers and was
on extremely shaky legal ground," the company stated. "In addition,
merger conditions cannot be used as a backdoor way to impose
requirements on a non-party to the merger. The courts have been clear
on this point."

The FCC approved AT&T's purchase of BellSouth in December.

In 1984, the original AT&T, or "Ma Bell," was split into regional
"Baby Bell" companies, including Qwest and BellSouth.

Copyright 2007 Reuters Limited.

NOTE: For more telecom/internet/networking/computer news from the
daily media, check out our feature 'Telecom Digest Extra' each day at . Hundreds of new
articles daily. And, discuss this and other topics in our forum at (or)

For more news and headlines, please go to:

Post Followup Article Use your browser's quoting feature to quote article into reply
Go to Next message: Reuters News Wire: "AT&T Says Recieved One Million Inquiries on I-Phone"
Go to Previous message: "Re: Unlisted Phone Number"
TELECOM Digest: Home Page