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New York Commission: Limits Could be Placed on Verizon/MCI MergerNew York regulators won’t rubber-stamp the pending Verizon/MCI merger. By TED GLANZER TMCnet Communications and Broadband Columnist It appears that New York regulators won’t rubber-stamp the pending Verizon/MCI merger without imposing conditions to the multi-billion dollar deal. Indeed, last week the New York Public Service Commission (NYPSC) issued a staff white paper in which it pointed to a major increase in market concentration occurring from the Verizon/MCI merger, impacting both the enterprise transport market for business customers, and the mass market for consumers. Accordingly, the white paper sets forth several potential remedies to “offset what appears to be a reduction of choice,” including the following: • MCI must continue to offer its retail residential service for a year after the merger is approved. • Before Verizon is permitted to exercise any potential pricing flexibility in those areas in the future, it must show that it is maintaining good service quality performance according to the Commission standards. • Require Verizon to offer “naked DSL” wherever it offers DSL services to its own customers. This would allow customers to use DSL to take advantage of the burgeoning Voice over the Internet Protocol (VoIP) market without also subscribing to Verizon’s telephone service. • Preserve customer choice by allowing smaller competitive wholesale carriers to continue to provide their services to medium and large customers, thereby preserving customer choice. For example, smaller carriers would be entitled to the same rates, terms and conditions for wholesale services that they currently receive from MCI, or which are currently tariffed or offered under Special Pricing Arrangements (SPAs), for a period of 36 months. The white paper’s tentative conclusions were roundly applauded by consumer and competitive groups, such as the Alliance for Competition in Telecommunications (ACTel), a group of service providers that have united to oppose the Verizon/MCI and SBC/AT&T mergers. “The New York PSC staff findings are exactly in line with ACTel’s own studies based on the same HHI parameters, and they lend credence to the substantial concerns [that] consumers and business customers have with both the proposed Verizon/MCI and SBC/AT&T mergers,” said Heather Gold, senior vice president-government relations at XO Communications, a member of ACTel. “By rigorously analyzing and demonstrating the real competitive harms that flow from the proposed merger, the staff provides a road map for federal and other state officials reviewing these proposed mergers.” A Verizon spokesperson, however, viewed the preliminary findings in a positive light. “This report from the PSC staff about its preliminary analysis of our transaction with MCI is an important additional step in completing the merger approval process in New York,” said Thomas McCarroll, Verizon vice president for regulatory affairs in New York and Connecticut. “We are confident that a complete analysis of the robustly competitive communications marketplace in New York will bring the PSC to the conclusion that customers across all market segments will see the benefits of the combination of Verizon and MCI. The facts show that the combination of Verizon and MCI will create a strong new competitor whose customer focus and commitment will allow us to better offer innovative new services, packages and products, particularly to the major businesses now served by MCI, without negative effects on competition in any aspect of the market.” The white paper also addressed the $16 billion SBC/AT&T merger, stating that it does not raise the same level of concern as the Verizon/MCI merger in New York. Instead, according to the white paper, the major issue associated with the AT&T/SBC merger centers on the consolidation of the nationwide large business market. Regardless, both planned mergers still require approvals from the Federal Communications Commission, the Justice Department and various states, including New York. Toward that end, the NYPSC is seeking public comment on this issue through Aug. 22. ----- Ted Glanzer is assistant editor for TMCnet. For more articles by Ted Glanzer, please visit: http://www.tmcnet.com/tmcnet/columnists/columnist.aspx?id=100033&nm=Ted%20Gl anzer |