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story category AT&T Offers New Merger Concessions
A little more meat, still quite a lot of fluff...
(old news - 09:26AM Friday Dec 29 2006)
tags: competition · fcc · business
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When AT&T originally offered concessions to the FCC in order to acquire BellSouth, we noted that most weren't really "concessions" at all -- instead they were things AT&T was already doing, none of which incurred much of a cost for the telco. The concession debate left the FCC in a partisan deadlock over letting the merger move forward. AT&T has now submitted a list of new concessions, which the Consumer's Union is calling "an enormous improvement from where we were a month ago."

However, looking at the list, the promise to offer "naked" DSL (DSL without force-bundled phone service) is restricted to just 768kbps. The promise to offer 85% DSL penetration in BellSouth territory has already been achieved. And there still isn't much worth in promising (for just 30 months) to adhere to the FCC's network neutrality principles, because, as we've discussed before, they aren't really laws -- so they carry no real penalty if violated cleverly -- particularly on Martin's watch, where nothing but a total block of competitor traffic warrants action.

Industry analyst Dave Burstein informs us that AT&T has included a loophole in the network neutrality language anyway, lawyers noting the concession "does not apply to AT&T/BellSouth's Internet Protocol television (IPTV) service," the portion of their network that is pay to play. "The lawyers fighting this in D.C. won’t even discover they’ve been bamboozled until afterwards if the commission goes ahead and rushes this through," he opines.

Merger supporters are excited and are circulating the rumor that these changes could get the deal done as soon as today. So far, however, there's been no public comment from Democratic Commissioners Adelstein and Copps, who are the ones AT&T needs to please if this deal is going to get done before the end of the year.

Related:
  1. Cable Industry Fights For Exclusive Programming
  2. What Network Neutrality Is REALLY About
  3. FCC: We're Halfway Done With National Broadband Plan
  4. Cable Industry: Shucks, Guess Nobody Wants CableCARDs
  5. Don't Judge Wireless Competition By The Number Of Carriers
  6. FCC Study: Open Access Lowers Prices, Improves Competition
  7. FCC Begins Crafting New Neutrality Rules
  8. 'Data Driven' FCC Still Using Ancient Data?
Forums » AT&T Offers New Merger Concessions
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brianiscool

join:2000-08-16
Miami, FL

FCC leave them alone

Just let the merger happen no problems asked.

Topmounter
Sent By Grocery Clerks

join:2001-02-20
Evergreen, CO
·Cox HSI

Re: FCC leave them alone

My comment from the Morning Broadband Bytes thread:

Net neutrality should only apply in non-competitive markets.

I'd rather see cable, telco and wireless compete instead of having the government telling them what service they can and cannot offer.
bi0tech

join:2003-06-19

Re: FCC leave them alone

said by Topmounter See Profile :

Net neutrality should only apply in non-competitive markets.
Because there are so many more 'competitive' markets than essentially non-compete? Choice of broadband in the US usually means you have it or you don't. True competition in alot of markets is usually a smokescreen, with every party involved clouding the data.

Net neutrality has nothing to do with what service can be offered. It is about the ability to prioritize traffic at the expensive of everything else. And no matter what spin the telecom giants want to put on it, it's always bad for the consumer and competition.

Topmounter
Sent By Grocery Clerks

join:2001-02-20
Evergreen, CO
·Cox HSI

Re: FCC leave them alone

If the government mandates that all broadband be some bureaucratic definition of what he or she considers to be suitably vanilla, then where is the incentive for new players to enter the market? How do competitors differentiate themselves from the incumbent? What if I want to pay to have certain traffic prioritized higher? Why shouldn't I be able to subscribe to service tailored to my usage habits?

I know you think "Net Neutrality" sounds like a good idea, but we need less government regulation and more competition, not the opposite.
bi0tech

join:2003-06-19

Re: FCC leave them alone

said by Topmounter See Profile :

If the government mandates that all broadband be some bureaucratic definition of what he or she considers to be suitably vanilla, then where is the incentive for new players to enter the market? How do competitors differentiate themselves from the incumbent? What if I want to pay to have certain traffic prioritized higher? Why shouldn't I be able to subscribe to service tailored to my usage habits?

I know you think "Net Neutrality" sounds like a good idea, but we need less government regulation and more competition, not the opposite.
You seem to take the concept of any regulation to mean cookie cutter service by all. This is purely rediculous in an environment as diverse in geography and methodology. Variations in reliability, speed, support, and innumerable other packin's and the ever popular bundling services are more than enough to differentiate a product from another. That entire concept is irrelevant to neutrality.

Why you seem to think that forcing yourself into control by a local incumbant, based on prioritized packet handling shows either a complete misunderstand of how networks currently work or a some rather masochistic tendencies. Consider that once you open this box there are no real limitations on what they can do with controlling what traffic you can send and receive, to whom, at what speed. You want to be able to pay more for prioritized traffic? Ok but you don't even make that choice, they do. They choose what partners to make the enhancements for. If you want another provider for that solution then you will only receive the negative end of this as network saturation impedes the traffic which would normally have an equal chance.

Sorry broadband in today's society is not a luxury, it's a utility. Regulation of some kind, however lightly, is really a no brainer.

I've yet to see any cogent explanations of why net neutrality must be abandoned (yes, the net started this way from the original concept). It all seems to come down to capitalists and salesmen drooling over how to deliver the same thing in a new package for twice the cost.

karlmarx

join:2006-09-18
iraq
·Fairpoint Communic..

What exactly is a 'competitive' market? Is that a market where the FCC has determined the zip code (even if it's only 1 house) has broadband, when 99.99% of the people can't get it? Is that the market where you can get raped by comcast, or you can get raped by verizon? Does a competitive market include satellite, with 100MB download caps, and 1000ms latency? Is the dial-up market 'competitive'?

Net Neutrality has NOTHING TO DO with competition. Net Neutrality forces the companies to provide US (the customer) with what we are paying for. If I'm buying an 'internet connection', I expect it to work as the entire internet does, BEST EFFORT. If my provider can't provide me with the latency, or bandwidth I want, then I change providers. What my provider CANNOT do, is create a '2-tier' internet, where some web sites are served faster than others. What my provider CANNOT do is throttle my bittorrent traffic. If my provider sells me 10MB/1MB, I expect to be able to use that pipe in any manner I SEE FIT. That is what net neutrality is all about.
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RJ44

join:2001-10-19
Nashville, TN

Re: FCC leave them alone

said by karlmarx See Profile :

If I'm buying an 'internet connection', I expect it to work as the entire internet does, BEST EFFORT.
So you want your IPTV to be best effort, or do you just think IPTV should be banned?

kapil
The Kapil

join:2000-04-26
Chicago, IL
Why, so the consumer can get raped some more?
bigjimc

join:2003-04-21
Middleboro, MA

IS it just me or....

Does it look as though if the FCC were to accept these "concessions" then AT&T would effectively get its nationwide TV franchise? (ok.. just 22 states) In the letter it talks about their commitment to provide this service and would if the merger was approved.

This is a backdoor tactic to get around local franchises. FCC beware....

morbo
Complete Your Transaction

join:2002-01-22
00000
clubs:
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1 edit

...where are the telco fanboys? oh, I hear them coming...

this news is just more of the same bullshit "concessions" from AT&T and gang. they are being stubborn and greedy, surprise surprise. they want it all by their rules and, oh by the way, fukc the consumer. hope the FCC has it in them to force REAL concessions and not the current joke.

TKJunkMail
Enjoy the sun
Premium
join:2002-03-03
Avalon, NJ

About time this merger should be approved

The Dem foot dragging should end and this merger should be voted on - either up or down.

Alpine
Premium
join:2000-01-11
Atlanta, GA

Re: About time this merger should be approved

Yep. The concessions are fine, and several of them have absolutely nothing to do with the merits of the deal nor antitrust concerns. Many of them are just extortion from competitors and the Democrats - bribes for allowing this through.

People whining about the as-yet vaporware "net-neutrality" problem, including industry "expert" Burnstein, need to realize that the FCC isn't around to impose restrictions on one company that they don't impose on anyone else. They've done it correctly here - they've agreed to 30 months of following the "net-neutrality" principles stated by the FCC in order to let Congress decide on the actual rules. Congress is supposed to make laws - not the FCC.

Let's get it through. They've already given the extortionists several cookies...

Adam

Michieru2
zzz zzz zzz
Premium
join:2005-01-28
Miami, FL

This got nothing to do with Dem's.

Has to do with down right bullshit concessions. If you think that it's beneficial that now we have up to 6000kbps/768kbps dry pair lines only to hop down to 768kbps/768kbps. To me this is actually hurting any growth in the broadband industry itself for expansion and help the country gain better speeds.

It's not all about taking a bite out of cable, as cable would only increase there speeds where there is competition. AT&T insists on using old technology and with the merger concessions show nothing new than already exists today so I find this merger still to be rather pointless even if it's a vertical merger.

Tell me something good that will come out of this merger and then I might begin to see it in a different light but from what I see now, I won't approve it even if they offered a endless supply of Pina Colada's.

Alpine
Premium
join:2000-01-11
Atlanta, GA

Re: About time this merger should be approved

Hurting growth? I can't see how $10/month DSL or $20 naked DSL will somehow hurt growth. It might hurt the growth of their competitors, but that's called "business."

The merits of the merger have absolutely zero to do with increasing speeds or which technology they use. THat's 100% up to them and the FCC has no say.

That's what so many people around here don't seem to understand. THe FCC isn't around to look at the business case for the merger. It's only there to make sure antitrust violations are addressed (which they have been with ATT selling off all BellSouth spectrum, among other things.) They don't care (or at least "shouldn't care") about the company's business strategy or the technology they use. Period.

Adam

Michieru2
zzz zzz zzz
Premium
join:2005-01-28
Miami, FL

Re: About time this merger should be approved

I could see considering that a dry pair is only 5 dollars extra. While the 10/month cost is only for one year of service and under contract.

While the FCC has nothing to do in regards of competition the court does which is why it first much be approved by a court while FCC handles and checks for any violations.

As for hurting growth with competitors that is true, but this is cutting there lifeline and although I do agree they should all deploy there own networks this is suicide period. On top of that why does the article state the following "However, looking at the list, the promise to offer "naked" DSL (DSL without force-bundled phone service) is restricted to just 768kbps."

Meaning they are cutting there competitors speeds so it is about speed restrictions to 3rd party providers and on top of that it means they can offer 1.5mbps speeds and can consider themselves as the superior product. This is not beneficial competition this is hurtful competition or should I say murder competition to eliminate a group of companies all together where the battle will now simply be cable and telco.

Alpine
Premium
join:2000-01-11
Atlanta, GA


1 edit

Re: About time this merger should be approved

quote:
to eliminate a group of companies all together where the battle will now simply be cable and telco.
What is it now? That's the fight - cable vs telco. The sooner everyone realizes that reality, the sooner we can go forward.

I assume you're talking about "murdering" CLECs. CLECs are fine and dandy, but the bottom line is that they can't do squat by themselves. Except for the rare Covad (who I really applaud for trying to build out their own network,) CLECs are simply the dingleberries of the telco business. They use ILEC lines, they use ILEC facilities. THey can't really innovate because they don't have their own networks. They'll still be able to lease lines (especially considering the price freeze put in as a consession,) but at this point they serve very little purpose.

Adam

Michieru2
zzz zzz zzz
Premium
join:2005-01-28
Miami, FL

Re: About time this merger should be approved

Even with Covad they still require to lease the copper and the price hike is simple idiocy. I am connected through a Covad facility which goes all the way to the Atlanta, GA POP from Speakeasy.

So even Covad is affected as they use ILEC lines. CLECs are gone and now instead of having several competitors we have two and maybe even three if Covad survives.
zooropean

join:2003-08-27
Lake Zurich, IL
There are still some facilities-based CLECs which only lease the last mile from the ILEC. I used to work for one. They were actively trying to find alternatives to leasing the last mile, however.
bmn
? ? ?
Premium,ExMod 2003-06
join:2001-03-15
hiatus

1 edit
If its going to be a tie, then what ?
--
Prove it...

kapil
The Kapil

join:2000-04-26
Chicago, IL

Tipped By Corona?

Just copy the news releases from AT&T's website, why don't ya'.
tmc8080

join:2004-04-24
Floral Park, NY

Docsis 3.0 will run wild over YOU AT&T!!

AT&T will roll over and die versus docsis 3.0 capable
service areas. There is nothing really new besides some business ethernet contract savings and tariff adjustments to customers who really should be looking elsewhere for business data anyway. The service commitments for DSL @ 200-768kbits is totally lame for 2007, Maybe 1995 would have impressed many, but today?!? Might as well bond a few 56k modems together over plain old copper.. that's how backdated this offer looks.
The rollout of fiber is much too weak to be considered anything but laughable. No provisions or technical clarity on how they intent to connect apartment buildings or areas where construction will be more complex than a basic residential install.

Competition from cable: a fully implemented docsis 2.0 (widely and cheaply available cable mso equipment) network of hubs would trounce anything intended to be deployed by at&t, which we all know that customers will vote with their feet and switch! Docsis 3.0 would be able to go HEAD TO HEAD with fttc/fttp in areas where AT&T would attempt to deploy a network-- but I suspect AT&T will be a weasel and bring the network to places where there IS NO CABLE MSO to compare services for a large portion of the construction so they don't have to increase speeds, and lower prices and offer much more cost effective VOIP instead of POTS service as part of the bundles.

As we've discussed here numerous times, the building of AT&T's network is neither robust enough nor fast enough to satisfy the demands of high speed video, data, or able to compete in the marketplace, while potentially locking out a valuable commodity: network rights of way which could be deployed by a 3rd competitor who REALLY would deploy a future proofed network.

AT&T doesn't have to merge to deploy the network in its current areas, so why should they be rewarded for petty commitments after they just gobbled up SBC!? Wouldn't the fcc/doj want to see some results on that merger first, before DOUBLING DOWN the number of customers they will be poised to disappoint?!? And in areas where they compete on their own terms-- literally handing customers over to the competition: CABLE
??????????????????????????????????
RodTag

join:2003-02-05
Kaufman, TX

Re: Docsis 3.0 will run wild over YOU AT&T!!

SBC gobbled AT&T not the other way around.

Alpine
Premium
join:2000-01-11
Atlanta, GA

Just got word from DC...

That it's now "very likely" that the merger will be approved today.

Look for an announcement before too much longer...

Adam

Matt
Take me down to the paradise city
Premium
join:2003-07-20
Jamestown, NC

What does this mean?

Can someone lay out the benefits of this merger without putting on their rose colored glasses first?
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Use the OS tool for the job.

morbo
Complete Your Transaction

join:2002-01-22
00000
clubs:

Re: What does this mean?

smoke and mirrors.
bmn
? ? ?
Premium,ExMod 2003-06
join:2001-03-15
hiatus
For consumers, there are none. Seriously. Bellsouth already had plans to do a lot of what ATT was discussing doing.

There are no objective reasons showing that this merger should or needs to go through.
--
Prove it...

Matt
Take me down to the paradise city
Premium
join:2003-07-20
Jamestown, NC
·North State Commun..

Re: What does this mean?

said by bmn See Profile :

For consumers, there are none. Seriously. Bellsouth already had plans to do a lot of what ATT was discussing doing.

There are no objective reasons showing that this merger should or needs to go through.
That is what I was thinking.

I was just wondering if anyone Pro-ILEC had anything to add that perhaps I may be overlooking because of my cynicism about the merger?
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Use the OS tool for the job.
jtel

join:2005-06-28
Bristol, RI

Re: What does this mean?

Congress convenes early this coming year, January 4, so ATT will drop plan B if this doesn't move the deadlock today.

sfdjlk

@swbell.net

Not much harm nor help.

This is a pretty neutral merger. BS and AT&T don't compete now, so it will not change the competitive landscape in that way.

It will allow the combined company to deploy VDSL2 and IPTV to a wider area faster, sharing the fixed costs of IPTV over more subscribers. Since AT&T Uverse product seems to be easier to build out to multiple markets rather than to all people in a market, this should mean that they can roll it out faster.

However, they seem to be having problems getting it to work well anyway ( see UverseUsers.com ).

They should be able to combine some of the headquarters groups and reduce headcount where there is overlap. The field organizations should be immune since it still takes people to make things work locally.

The combined buying power should let them get even better deals on equipment. This has a negative effect on the telecom equipment providers since they will either have huge sales wins or nothing. In general, equipment providers are better off with a lot of smaller deals so that they can hit revenue targets.

Their networks are neutral now, so agreeing to some form of network neutrality is pretty easy for them. I am wondering if all of Whitacre's comments were redherrings so that they could give up something they didn't intend to do anyway.

This doesn't change the competitive landscape between the telcos and cable either. It does let the combined company have the reach to become a mid to upper tier cable competitor in terms of video customers.

They get to go through another rebranding exercise to change BS and Cingular to AT&T.

Unless you are one of the people laid off in the merger, this will not be a big thing to most consumers.

Fred

The King

@fuse.net
This merger only benefits BellSouth shareholders. There is no benefit to anyone else whatsoever.

TKJunkMail
Enjoy the sun
Premium
join:2002-03-03
Avalon, NJ
·Sprint Mobile Broa..
·Comcast

said by Matt See Profile :

Can someone lay out the benefits of this merger without putting on their rose colored glasses first?
Here is what the official announcement says the benefits are:
»www.fcc.gov/ATT-BellSouth_Press_Release.pdf

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Paladin
Sage of the light

join:2001-08-17
Chester, IL

Force them to go all out with fiber

Make them do FTTP everywhere like Verizon is doing. Otherwise, any merger should be defeated.

viperpa33s
Why Me?
Premium
join:2002-12-20
Bradenton, FL

Like giving candy to a baby

Like giving candy to a baby. The baby in this case are the politicians that need to approve the merger. Give the candy long enough to make you happy and then take it away when it's not in our interests as in this case AT&T.

n2jtx

join:2001-01-13
Glen Head, NY
·Optimum Online

When is the Verizon/AT&T Merger?

I was wondering when the Verizon/AT&T merger is going through. My personal guess would be before COB 12/31/2007 but of course that depends on the current AT&T/BellSouth merger completing before January 2007.

It will be like pre-1984 all over again only with less infrastructure competition since MCI is longer in the business of offering competing nationwide LD service. Does Embarq (the former Sprint LD division) still offer competition? Yes the cable companies and cell phone companies are alternative BUT they still have to pass some traffic over the AT&T, BellSouth, Qwest and Verizon networks. I have a feeling that once it is all one big "happy" company again, you find a lot of unhappy non-ILEC customers.
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sfdsdfe

@swbell.net

Re: When is the Verizon/AT&T Merger?

Never.

Since they have competing cell phone companies - not going to happen unless they sold off one, which would remove the incentive to do a merger.

Plus, this would be a merger of equals, and SBC/AT&T likes to have the surviving executive ranks. So, Verizon management isn't going to lay themselves off.

Fred
badshot23

join:2004-10-05
Independence, MO

said by n2jtx See Profile :

Does Embarq (the former Sprint LD division) still offer competition? Yes the cable companies and cell phone companies are alternative BUT they still have to pass some traffic over the AT&T, BellSouth, Qwest and Verizon networks. I have a feeling that once it is all one big "happy" company again, you find a lot of unhappy non-ILEC customers.
Um, last I heard, Embarq was former Sprint LOCAL service. Sprint retained the LD portion.

TKJunkMail
Enjoy the sun
Premium
join:2002-03-03
Avalon, NJ
·Sprint Mobile Broa..
·Comcast

Consumer advocates applaud AT&T concessions

»www.dicksonherald.com/apps/pbcs.···61229009
Consumer advocates are praising the compromise. Gene Kimmelman, vice president of federal and international affairs for Consumers Union, who has worked closely with the Democrats, said AT&T's concessions are "an enormous improvement from where we were a month ago."

Bill Mason, the executive director of Tennessee Citizen Action, said the concessions were “a significant improvement” over earlier conditions that AT&T had offered.

AT&T offered the concessions after a little more than a week of marathon negotiations with lawyers who work for the two Democrats on the commission, Michael Copps and Jonathan Adelstein, documents show.

AT&T Inc. has offered a new set of concessions that are expected to satisfy the two Democrats on the Federal Communications Commission and lead to approval of the company's $85 billion buyout of BellSouth Corp.

Approval by the full commission could happen as soon as today.
Sounds like the Dems will now be for approval. The vote could happen today.
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dslextreme
Premium,VIP
join:2001-02-23
Canoga Park, CA

Naked 768 DSL for $19.95

That's a $5 increase in the current rates and is very palatable.

Unfortunately there is nothing guaranteeing this on the faster packages. I would much rather see $5 more than current phone bundled DSL prices... or something to that effect.
Forums » AT&T Offers New Merger Concessions


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