Critics Argue AT&T/BellSouth Threatens Net Neutrality and VoIP

By ROBERT LIU

TMCnet Wireless and Technology Columnist

 

Even though the ink on the merger agreement between AT&T and BellSouth is barely dry, consumer groups are already calling for regulators to block the proposed $67 billion deal, characterizing it as a detriment to net neutrality and VoIP.

 

Consumers Union and Consumer Federation of America said they plan to ask the Justice Department to block the RBOC merger. According to statistics compiled by TMCnet, a combined AT&T/BellSouth would have nearly 42 percent of the market share for U.S. consumer access lines.

 

“Broadband was one of the few remaining opportunities for competition in telephone service,” said Mark Cooper, director of consumer research for Consumer Federation of America. “Now that door has been closed. If Justice now approves this merger, it slams yet another door.”

 

Ironically, last year when AT&T merged with the predecessor SBC Communications, it was the Federal Communications Commission, not the Justice Department, which placed more stringent requirements on the previous merger forcing AT&T (News - Alert) to open up its broadband network by offering so-called “naked DSL” – that is DSL service without forcing customers to use incumbent phone service.

 

“The government has been deceived before by promises that somehow more concentration would produce more choices and competition, when the result has been just the opposite. It shouldn't be fooled again,” said Gene Kimmelman, vice president for federal and international affairs for Consumers Union.

 

"If approved, this merger will lead to higher local, long distance and cell phone prices for consumers across the country," Kimmelman added.

 

Kimmelman added that government regulators should at the very least require the merging companies to sell their Cingular wireless business to create more competition. But given that Cingular is one of the primary motivators (if not the motivator), AT&T and BellSouth officials won’t ever let regulators put the wireless assets on the bargaining table.

 

In fact, AT&T played up the bundling of Cingular service with AT&T’s business offerings at an analysts meeting at the end of January. If the AT&T deal with BellSouth (News - Alert) is completed, company officials indicated the company will be renamed “AT&T Wireless.”

 

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Robert Liu is Executive Editor at TMCnet. Previously, he was Executive Editor at Jupitermedia and has also written for CNN, A&E, Dow Jones and Bloomberg. For more articles, please visit Robert Liu's columnist page.