"AT&T's proposed $67 billion purchase of BellSouth triggers reasonable consumer fears about the return of the old Ma Bell phone monopoly."

- Baltimore Sun Editorial, March 7, 2006

• The merger will eliminate local competition. BellSouth reported to the FCC last year (before this merger was announced) that AT&T is their largest local competitor for businesses in all 20 of the top 20 MSAs (metropolitan statistical areas) in the BellSouth region. AT&T is also the largest long distance service competitor in the BellSouth region. AT&T indicates that as of February 2006, it had 2 million local and long distance customers in the BellSouth franchise territory. Following the merger, BellSouth will absorb these customers, resulting in a BellSouth market share of approximately 75% of the long distance market. AT&T is also the largest potential VoIP competitor to BellSouth. The customer growth rate for AT&T's VoIP service, CallVantage, was 100% in the last year.

• AT&T/BellSouth's combined resources will dwarf all other telecom competitors and quickly crush competition. In 2005, AT&T's pro forma operating revenues were $63 billion and BellSouth's revenues were $34 billion. In comparison, ITC DeltaCom, the largest facilities-based competitive carrier in the BellSouth territory, reported revenues of $415 million in 2005, less than one half of one percent of the AT&T/BellSouth revenue. The AT&T-BellSouth combination would enjoy a 30 percent nationwide share of the customer segment primarily targeted by competitive carriers, small and medium businesses, while its largest non-Bell competitor (XO) would have only four percent.

• AT&T/BellSouth will control a telephone monopoly that stretches across most of America. "The combined region would include nearly half the states in the US, including seven of the ten most populous (California, Texas, Florida, Illinois, Ohio, Michigan and Georgia) and two-thirds of its population. Combined, the population of these states in 2005 was over 195 million, or nearly two-thirds of the total population of the US! Because AT&T’s long distance operations would now be part of the merged entity as well, the merger would have the effect of reconstituting the old Bell monopoly for two-thirds of the American people, and the bad old pre-divestiture days of rampant discrimination and favoritism, which have already been on the rise, will for all intents and purposes complete their triumphant return."

-- Petition to Deny of Access Point, et al., filed June 5, 2006.

•Business customers oppose the merger. "The result will be that enterprise customers wil have fewer choices, pay higher prices, and have less robust options to ensure that their business is adequately protected in the event of a disaster or other network outage. Productivity and innovation wil suffer."-- ScanSource, FCC Reply Comments, June 20, 2006. ( "A major BellSouth enterprise customer and a former AT&T enterprise customer, ScanSource opposes the merger of AT&T and BellSouth because it will eliminate actual and potential competition in the enterprise telecommunications marketplace.")

Wireless innovators oppose the merger. "With unfettered control over large overlapping broadband wireline and wireless platforms, and a nearly nationwide footprint at 2.3 GHz, AT&T will have an enhanced incentive and ability to impede the development of independent facilities-based competition for the delivery of nationwide mobile wireless broadband access services in the 2.5 GHz band."

-- Reply Comments of Clearwire Corporation, FCC, June 20, 2006.

• Rural companies oppose the merger. "With unchecked market power, these multibillion dollar companies will have a greater opportunity to conduct predatory pricing and implement discriminatory practices against their much smaller competitors . . . If these and other new mega-corporations abuse their market power, small communications providers could be harmed dramatically and rural consumers could find themselves in a world without certain services or a world without competition for voice, video or data services in their rural communities."

-- National Telecommunications Cooperative Association, FCC Reply Comments, June 20, 2006. (NTCA is a cooperative representing nearly 600 rural incumbent telephone companies.)

News on Competition in the Telecom Industry

Court Reviews Verizon/MCI and SBC/AT&T Mergers - Broadcasting & Cable

Judge Plans to Review AT&T, Verizon Deals - CNET News

Judge Questions Telecom Merger Agreements - Computer World