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Justice Department Green Lights AT&T-BellSouth Merger

October 11, 2006

AT&T • Slamming • Long Distance • Local • Wireless • Broadband • Telemarketers --- News • NY to AT&T: Please Deposit $2.63 Million • AT&T Agrees to Refund Some Ringtone Charges • States Asked to Probe AT&T U-Verse Explosions • AT&T Exits Pay Phone Business • AT&T Changes Contract Policy • AT&T Changes Terms Of Service After Outcry • AT&T Agrees to New Stolen Cell Phone Rules • AT&T Stiffens Language Covering Objectionable Content • AT&T Adds Parental Controls To Mobile Phones • AT&T Slammed Over Rebate Policies • Appeals Court Shreds AT&T Arbitration Clause • Court OKs Rebate Lawsuit against Cingular/AT&T • AT&T Trashes Cingular Brand • AT&T Offers Net Neutrality Concessions To Win Merger Approval • FCC Delays Decision On AT&T/BellSouth Deal • Justice Department Green Lights AT&T-BellSouth Merger • FCC Clears the Way for AT&T-BellSouth Merger • AT&T Trumpets New TV Service • AT&T Web Site Hacked; Customer Data Exposed • AT&T Sues Calling Record Brokers • AT&T Declares Consumers' Personal Data "Corporate Property" • AT&T Plans to Kill Cingular Name • Report: AT&T Acquiring BellSouth • SBC Recast as AT&T • FCC approves AT&T, MCI Deals • Justice Dept. OKs AT&T, MCI Sell-Outs • SBC Will Keep AT&T Name • Consumer Groups Oppose Big Telco Mergers • SBC Buys AT&T • AT&T Will Pay Refunds to New Yorkers • AT&T Will Pull Out of 7 States • AT&T Teams With Sprint to Return to Wireless Business • Minnesota Sues AT&T • Class Action Charges AT&T With Slamming • Another AT&T Rate Hike • AT&T Hiking Minimum Fees • AT&T Faces $780,000 Do-Not-Call Fine • AT&T Will Run Do-Not-Call List • Supreme Court Denies AT&T's Appeal of Arbitration Ruling

The union of telecom giants AT&T and BellSouth has passed its first major governmental hurdle, as the Justice Department declined to raise any anti-trust objections.

Consumer groups blasted the decision, saying the largest telecom merger yet would to leave consumers with fewer choices and inflated prices for many services.

"DOJ's rubberstamp on this merger suggests the Justice Department has thrown in the towel on competition between the Bell phone companies," said Gene Kimmelman, senior vice president of Consumers Union.

"The Justice Department has abdicated responsibility to promote the competition it promised when it broke up AT&T 20 years ago," he added. "In the end, the majority of consumers will end up paying inflated prices that result when Bell companies merge and dominate local, long distance, wireless and Internet services in their territories."

The AT&T/BellSouth merger is just the latest in a ten-year wave of consolidation following passage of the 1996 Telecommunications Reform Act -- legislation intended to unleash competition among the baby Bells in both local and long-distance service.

But in spite of the stated intention, the eight baby Bells consolidated into just four companies and have gobbled up long distance carriers. Just last year, DOJ approved the SBC and Verizon buyouts of long distance carriers AT&T and MCI, respectively. Meanwhile, consumer groups maintain that competition in local phone service has declined as Bell companies sued to eliminate pro-competitive policies in the Act.

Despite claims that this merger might foster competition between phone companies and cable giants, critics counter that cable companies are just now entering the phone market and are not positioned to compete with the national phone behemoth that will exist as a result of this merger.

The other potential competitor -- voice-over-internet phone service (VOIP) -- that relies on broadband connections, is threatened by the ability of the Bells and cable companies with broadband wires to disrupt VOIP transmissions, the groups say.

"New Internet telephone service which could compete against phone companies can now be blocked by the merging AT&T and BellSouth giant. Consumers know that without real competition, prices will continue to go up and the drive for innovation will evaporate," said Mark Cooper, research director for Consumer Federation of America.

"DOJ's decision makes the Federal Communications Commission's review of the merger even more critical," said Kimmelman. "With DOJ closing up shop on competition, FCC needs to step up and impose meaningful conditions that will salvage what little competition is left. The government has been deceived before by false promises that mergers of potential competitors benefit the public. It should not be fooled again."

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