TELECOM Digest OnLine - Sorted: BT Objects to US Telco Mega-mergers

BT Objects to US Telco Mega-mergers

Jack Decker (jack-yahoogroups@withheld_on_request)
Tue, 10 May 2005 10:09:36 -0400

Concerns over the competitive impact of the proposed mergers of AT&T
and SBC Communications and MCI and Verizon Communications are
increasing, with BT Group and the New York attorney general among the
latest object.

10 May 2005, 09:38 GMT -

BT met with US Federal Communications Commission staff late last week
to ask the regulator block the two mergers, saying that they would
create a "classic duopoly" in the telecommunications market, and
consolidate control of the internet backbone.

The UK incumbent carrier said the mergers "will significantly impede
effective competition, resulting in higher prices, lower quality and
reduced innovation for business customers", according to a FCC filing
released yesterday

AT&T is being acquired by SBC for $16bn, while Verizon is currently
the approved frontrunner to pick up MCI for $8.5bn, a drastic
consolidation of the US carrier market that needs separate regulatory
approval before they can be closed.

According to BT, allowing the SBC-AT&T merger would give the merged
company the ability to "abuse its dominance" over the local loop. This
would be compounded, the company said, by a simultaneous Verizon-MCI


New York Attorney General Eliot Spitzer, known as one of the fiercest
consumer rights activists in elected office in the US, did not object
to the mergers outright, but asks the FCC consider two potential
problems that mirror BT's concerns.

First, Spitzer said Verizon should be forced to offer naked DSL, that
is broadband internet connectivity without the requirement to take
phone service, if it buys MCI.

It should also be dissuaded from preferentially routing IP over MCI's
internet backbone, Spitzer said. Combined, BT's "duopoly" would
control over half of the internet's backbone assets, Spitzer claimed.

Also expressing some concern over the deals is Vonage Holdings, the
private company that is becoming a bit of a player in the voice over
IP space.

Full story at:

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