And By The Time Anyone Reads The Sneaky Fine Print On AT&T's Concessions, The Merger Will Be Done

from the fooled-ya dept

A few hours ago, we wrote about the concessions AT&T agreed to in order to get their merger with BellSouth approved -- possibly today. It was a little strange to see the concession letter come out late Thursday night before New Years, but the concessions seemed genuine enough, and many of the consumer groups fighting the deal accepted the terms and agreed that it looked like AT&T had agreed to live up to network neutrality rules. Of course, the fine print may actually tell a different story.

Dave Burstein, who knows more about DSL than probably just about anyone, lets us know that the fine print in the deal actually may negate the network neutrality premise. The wording is a little tricky, but while they agree not to remove network neutrality from their standard network, hidden in the middle of a later paragraph is this sentence: "This commitment also does not apply to AT&T/BellSouth's Internet Protocol television (IPTV) service." At first that might seem innocuous, but Burstein has pointed out that AT&T's always planned on using the IPTV network as that high-speed toll lane it wants Google, Vonage and others to pay extra for. Burstein notes that AT&T isn't even set up to put quality of service on their existing network -- so the agreement not to violate network neutrality on that network is effectively meaningless. It is, he claims, a sleight of hand that successfully fooled a bunch of people into supporting the deal, and will probably help it get approval. AT&T promises not to violate network neutrality on a network they never intended to use that way, and carves out permission to use it on their new network, where they had planned all along to set up additional tollbooths.

Also, in response to the original post, the details show that the naked DSL they're promising is limited to only 768k down, which is pretty slow these days. It's also worth noting that they don't say a damn thing about upstream speeds (as is the fashion these days), which means it's probably down around 128k. Again, Burstein points out that at such an upstream speed, VoIP tends not to work very well -- so for those who want naked DSL because they plan to just use VoIP instead of a phone line, AT&T may have just made that more difficult (I will say, personally, though, that I've been able to use VoIP at 128k, but it does break up if anyone else is doing anything on the network). However, after looking through the fine print, it certainly looks like the "concessions" AT&T agreed to aren't very big concessions at all.

Update: And, as expected, the FCC has now approved the merger. A lot of folks have been contacting us about this today, arguing on both sides of the equation, claiming that AT&T's concessions are a big deal, or that they've left plenty of loopholes. One thing that's for certain is that we haven't heard the last of this, and there's going to be plenty of arguing going forward about whether or not AT&T actually lives up to the spirit of what they're proposing.

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  1. identicon
    michael, 30 Dec 2006 @ 12:10pm

    Re: Expect 10,000 layoffs

    this just in at Business Week:

    “The combination of San Antonio-based AT&T and Atlanta-based BellSouth will have operations in 22 states. AT&T estimates that about 10,000 jobs will be phased out over three years.”
    http://www.businessweek.com/ap/financialnews/D8MAS9B00.htm

    It’s not clear from this admission where the job losses will come from, both AT&T and Bell South have downscaled heavily over the last decade. Bell South, in particular, maintains a grotesque mandatory unpaid leave policy. In any event, whatever outsourced positions the CWA managed to bring back has to offset against this greater loss (which are likely non-union positions anyway). The point is - a lot of lives get wrecked in these mergers and refusing to acknowledge or to mobilize against that only hurts us in the long run. We need to maintain better reality checks between our abstract policy goals and the issues that affect the lives of real people.

    Back in 1996 when AT&T let 40,000 go while giving the CEO a hefty bonus, one of their vice presidents summed it up this way:

    “People need to look at themselves as self-employed, as vendors who come to this company to sell their skills," explained James Meadows, one of AT&T's vice presidents for human resources, who has helped define the company's new rules of engagement.”

    "In AT&T, we have to promote the whole concept of the work force being contingent, though most of the contingent workers are inside our walls," Mr. Meadows said. "Jobs" are being replaced by "projects" and "fields of work," he said, giving rise to a society that is increasingly "jobless but not workless."


    So, over the next three years, 10,000 AT&T/Bell South workers can expect to have work but no jobs. I find no comfort in that.

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