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XO Study: SBC, Verizon Will Realize Huge Returns by Colluding
[October 21, 2005]

XO Study: SBC, Verizon Will Realize Huge Returns by Colluding


By TED GLANZER
TMCnet Communications and Broadband Columnist
 
SBC Communications and Verizon Communications Inc. will realize huge returns by intentionally not competing with one another in the wholesale market after their respective mergers with AT&T Corp. and MCI, Inc. are approved, according to a former Federal Communications Commission official.


 
“It pays not to compete, and the payoff for SBC and Verizon will be very rich,” Simon J. Wilkie, former FCC chief economist, said in a statement.  “Such tacit collusion will continue to occur as the two companies act in tacit agreement to reduce competition.”

 
Wilkie filed with the FCC a study on behalf of XO Communications showing that SBC stands to earn $1 billion more and Verizon close to $400 million by acquiring the two largest competitors in the wholesale market, while avoiding directly competing with one another.
 
XO has vigorously objected to the proposed multi-billion dollar mega mergers and has requested that the FCC impose several condition to protect competition in the telecommunications market.
 
SBC Vice President of Regulatory Policy, Emerging Services and Technologies Jeff Brueggeman will participate in a panel discussion entitled "VoIP Regulatory Update: Will You Be Ready?" at the INTERNET TELEPHONY Conference & Expo, which runs Oct. 24-27 at the Los Angeles Conference Center.  The session will cover E911 rules, the FCC's proceeding on the regulatory classification of VoIP service, and the impact of potential regulatory mandates in the future.
 
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Ted Glanzer is assistant editor for TMCnet. For more articles by Ted Glanzer, please visit:
 
 

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