DOJ Gives AT&T-BellSouth A Free Pass, But Competition Questions Remain

from the look-a-little-closer? dept

The Department of Justice has approved the BellSouth-AT&T merger with no conditions, surprising many observers that expected the department to raise some antitrust concerns over the combined entity's control of the consumer landline market. The decision sparked an angry response from the FCC's two Democratic commissioners, raising the possibility that the commission won't vote on the deal Thursday, as Chairman Kevin Martin had hoped. They and other critics of the deal say that the new company would control more than half of the country's landlines, be the largest broadband provider and the largest cellular operator in the country, giving it an unprecedented amount of control over the market. The control over landlines doesn't seem as particularly important as it once was, given the rise of competitors like VoIP and the replacement of fixed lines with cellular, which itself is a fairly competitive industry. The lack of meaningful competition for broadband, however, means that a combined, stronger AT&T-BellSouth will be better placed to maintain the status quo and hold down the level of competition. This is where things start getting sketchy: part of the DOJ's rationale for approving the deal is the emergence of new technologies will help maintain competition and consumer choice. The biggest of these is wireless broadband. However, when AT&T and BellSouth (through Cingular) are the top wireless provider in the nation and together will control significant amounts of wireless spectrum, particularly that which is earmarked for future wireless broadband technologies like WiMAX. So how can these new technologies emerge as viable competitors when, like the existing ones, AT&T can exert so much control over the market for them? Questions are being raised about the government's approval of previous telco mega-mergers; there are enough questions surrounding this one that it -- at the very least -- deserves thorough examination, and not to be rushed through the approval process by an FCC commissioner looking to deliver a deal before the upcoming elections.


Reader Comments (rss)

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  1.  
    identicon
    A chicken passeth by, Oct 11th, 2006 @ 5:17pm

    I guess this explains why connecting to certain sites in the US from Asia has been spotty of late...

    I don't trust a monopoly to work for the consumers - they don't need to, since people have no choice but to go to them.

    *TECHDIRT ADMINS READ THIS*: This article causes an exception in your RSS feed.

     

    reply to this | link to this | view in thread ]

  2.  
    identicon
    Solo, Oct 11th, 2006 @ 6:36pm

    Didn't regulators break down a huge telco company into little pieces for fear of monopoly?

    How is letting them all pieces merge back together helping consumers?

    Wait. It does not.

    Nice way to get political credit (or discredit) close to an election...

     

    reply to this | link to this | view in thread ]

  3.  
    identicon
    Stu, Oct 11th, 2006 @ 6:54pm

    Big surprise

    Our government does not act in the best interest of it's citizens.
    If they are in office vote them out - every time. ONCE AND DONE

     

    reply to this | link to this | view in thread ]

  4.  
    identicon
    CubFx, Oct 11th, 2006 @ 9:08pm

    Almost like being in a Lily Tomlin skit

    We don't care. We don't have to. We're the Phone Company.

     

    reply to this | link to this | view in thread ]

  5.  
    identicon
    CubFx, Oct 11th, 2006 @ 9:08pm

    Almost like being in a Lily Tomlin skit

    We don't care. We don't have to. We're the Phone Company.

     

    reply to this | link to this | view in thread ]

  6.  
    identicon
    Surly Curmudgeon, Oct 12th, 2006 @ 3:40am

    Telco Monopolies

    I thought Verizon Hawaii was bad, then the Carlyle Group (does that ring a bell--Bush's buddies) bought it. Not much consumer choice about landlines here. Thanks to Roadrunner we have a broadband alternative.

     

    reply to this | link to this | view in thread ]

  7.  
    identicon
    rushonbye, Oct 12th, 2006 @ 3:49am

    Re: Telco Monopolies

    George Bush, must be a conspiracy.

     

    reply to this | link to this | view in thread ]

  8.  
    identicon
    Happymellon, Oct 12th, 2006 @ 6:34am

    It only reduces competition if there was any...

    I am not clear on some aspects, such as is there any location where you had a choice between either BellSouth or AT&T?
    I personally can't think of anywhere, although I know that doesn't mean no such place exists. If they don't compete against each other then there shouldn't be an issue with any merger surely it'll still be the same monopoly just a different name? As mentioned before here, the issue isn't should they be merging, but are you limiting choices and until there are locations where you have the choice of telco there really isn't anything anti competative about this and the mergers will go on.

     

    reply to this | link to this | view in thread ]

  9.  
    identicon
    Joe, Feb 23rd, 2009 @ 12:59am

    Good site

     

    reply to this | link to this | view in thread ]


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