- The Washington Times - Wednesday, October 11, 2006


AT&T;’s proposed $78.5 billion buyout of BellSouth Corp. won Justice Department approval yesterday, a decision that could bring back together parts of the old Ma Bell phone monopoly dismantled by the government in 1984.

Despite the scale of the deal, the Justice Department found no potentially adverse effects on competition and approved the deal without conditions. That leaves the Federal Communications Commission (FCC) as the final hurdle to the merger creating the nation’s biggest provider of phone, wireless and broadband Internet services.

But the decision outraged consumer advocates and two members of the commission. An FCC vote scheduled for today was postponed late yesterday and a special meeting was set for tomorrow, with a vote possible then. There had been speculation that the commission may face a deadlock.

Democratic commissioner Jonathan S. Adelstein called it “a reckless abandonment of [the Justice Department’s] responsibility to protect competition and consumers,” including smaller business.

Michael J. Copps, the other Democrat on the FCC, called it a “lights-off” decision.

Mr. Adelstein said, “By failing to issue a complaint, consent decree or condition, it appears DOJ took a dive on one of the largest mergers in history just to avoid further court scrutiny.”

If the deal wins final government approval, the merger would give San Antonio-based AT&T; Inc. total control over the nation’s largest cellular provider, Cingular Wireless, a joint venture of the two phone companies that serves 57.3 million customers.

“After thoroughly investigating AT&T;’s proposed acquisition of BellSouth, the Antitrust Division determined that the proposed transaction is not likely to reduce competition substantially,” said Assistant Attorney General Thomas O. Barnett, who heads the division.

The department’s unconditional approval “underscores the competitive nature of our industry and the pro-competitive benefits of this merger,” AT&T; General Counsel James D. Ellis said in a statement.

BellSouth said, “We look forward to getting approval from the Federal Communications Commission in the very near future.”

Critics assert that the government is well on its way to reconstituting the old Ma Bell monopoly, which was broken up after a lengthy court battle.

The House Judiciary Committee’s chairman, Rep. F. James Sensenbrenner Jr., Wisconsin Republican, and other members of Congress had asked that the deal be held up until details related to two previous telecommunications mergers are settled and other concerns are addressed.

A coalition of consumer groups issued a statement condemning the Justice Department, saying the merger is “likely to leave consumers with fewer choices and inflated prices for a host of services.”

The Bush administration “has surrendered the rights of the public to have a competitive and democratic broadband media system,” said Jeffrey Chester, executive director of the Center for Digital Democracy.

“The public should be alarmed about a handful of broadband giants controlling much of the U.S. digital distribution system.”

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