TELECOM Digest OnLine - Sorted: Re: AT&T 'Family' Reunion: Merger Approved

Re: AT&T 'Family' Reunion: Merger Approved

Fred Goldstein (
Sun, 31 Dec 2006 13:08:27 -0500

In V25I431, wrote,

> I'm not sure I understand why the FCC should be dictating policy in
> this situation.

> AT&T is not the old monolithic and powerful Bell System. It is a
> shadow of its former self, keeping the name for marketing purposes.
> It's last power base, Long Distance, isn't worth much anymore with all
> the cheap fibre and satellite circuits lots of others have installed.
> As others have noted, even the traditional landline business is
> falling off for companies like Verizon.

This is truly a bizarro apologetic. Has Lisa been sleeping under a
rock this past year? The company in question is not "AT&T Corp.", the
long distance company that was a shadow of its former self, the
failing residuary of the old Bell parent company. That company failed
in 2005. The company in question is "AT&T Inc.", formerly SBC
Communications, formerly Southwestern Bell. It purchased the assets
of AT&T and the brand name. It is the monopoly ILEC in 13 states
(pre-BellSouth) and majority owner of Cingular Wireless. It faces a
little bit of competition, to be sure, but not a whole heck of a lot,
having bought out AT&T, and with Verizon owning the ex-MCI assets.
Those two do not compete very hard with each other, in case nobody's
noticed -- the Bells prefer to stick to their own turfs. And the
standalone LD business, where they overlapped, is almost dead.

> Consequently, I don't know why it should be forced to discount its
> rates for wholesalers. It should be free to do what every other
> business does -- if it feels it's in its interest to discount, it will
> do so, otherwise not.

Its network was built as a regulated utility, granted monopoly
status. Nowadays there is a legal right to compete but that doesn't
overcome the "natural monopoly" advantage of owning the
ratepayer-funded physical plant. The Telecom Act of 1996 was a
compromise, allowing the Bells into LD and other ventures in exchange
for allowing competition, which explicitly included "wholesale"
obligations. Now they want out of that part of the deal?

Also note the "best" part of the merger concessions: In their
statement, Martin and Tate said that they did not like the conditions
and WOULD NOT ENFORCE THEM, and indeed might PREVENT them from taking
effect! So the two Democrats on the FCC voted for conditions that the
Republican chairman then DISCLAIMED! Since the Order has not yet been
formally drafted, the Democrats do have time to back out. There are
also other legal ramifications; I wonder what the new Congress will

Martin's statement referred to the "Democrat Commissioners", using the
word "Democrat" as an adjective in lieu of "Democratic", the proper
form. Such usage is a common insult among southern Republicans,
reminiscent of Martin's mentor, Jesse Helms. Rumor has it he is
aiming for a Senate seat from NC and is thus sucking up to Jesse's

Post Followup Article Use your browser's quoting feature to quote article into reply
Go to Next message: "Re: Anti-Spam Tool Going Out of Business"
Go to Previous message: Ron Kritzman: "Re: AT&T 'Family' Reunion: Merger Approved"
May be in reply to: TELECOM Digest Editor: "AT&T 'Family' Reunion: Merger Approved"
Next in thread: Steven Lichter: "Re: AT&T 'Family' Reunion: Merger Approved"
TELECOM Digest: Home Page