by CIO Staff

DoJ OKs AT&T’s BellSouth Buy

Oct 11, 20062 mins

AT&T is free to complete its acquisition of BellSouth, the U.S. Department of Justice (DoJ) said Wednesday, ruling the deal won’t reduce competition in the telecommunications marketplace.

While the decision is still open to review by the U.S. Federal Communications Commission (FCC), the announcement clears a major hurdle for the US$67 billion purchase.

Members of the U.S. Congress and rival phone carriers have pleaded with government regulators to block the deal, fearing it would thwart competition. Telephony providers signing a recent petition to the FCC included XO Communications, Talk America Holdings and NuVox Communications.

Indeed, the combined companies would cover a significant portion of the United States. Just as SBC Communications expanded its western and southwestern regional phone network when it acquired AT&T’s nationwide long-distance services along with the AT&T name in 2005, AT&T would add southeastern regional phone service with the proposed BellSouth deal.

However, DoJ lawyers said that neither company—AT&T or BellSouth—would have to sell off any networks, as regulators had required before approving SBC’s bid for AT&T.

The DoJ’s antitrust division had investigated the deal’s impact on future competition for wireless broadband services, as well as the areas where the two companies currently compete, including residential local and long-distance service, business telecommunications and Internet services.

Investigators found that consumers’ welfare would not be harmed by the proposed buyout, thanks to the presence of other competitors, changing regulatory requirements and the emergence of new technologies such as voice over IP, Assistant Attorney General Thomas Barnett said in a release.

Barnett also said the deal would not affect “net neutrality,” the concern that a communications provider might favor its own Internet content over a competitor’s. Although the deal will certainly increase the number of subscribers to AT&T’s broadband network, the majority of nationwide Internet users are served by rivals such as Verizon Communications, Qwest Communications International, Comcast and Time Warner, he said.

-Ben Ames, IDG News Service (Boston Bureau)

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