http://www.benton.org/index.php?q=node/3697

AT&T, BELLSOUTH MERGER PASSES ANTITRUST TEST
[SOURCE: C-Net|News.com, AUTHOR: Marguerite Reardon]
AT&T and BellSouth got the green light from U.S. antitrust authorities on
Wednesday to move forward with their proposed $67 billion merger, which will
create the largest phone company in the United States. The Department of
Justice's antitrust division issued a statement approving the merger
unconditionally. The merger still needs approval from the Federal
Communications Commission, which is scheduled to vote on the matter
Thursday. The unconditional approval also drew harsh words from Sen. Daniel
Inouye, the Democratic co-chairman of the Senate Commerce Committee, which
counts communications laws among its responsibilities. The Hawaii politician
accused the Justice Department of ignoring potential negative effects from
the reduced competition wrought by the merger, saying in a statement that
the decision "not only flies in the face of the department's own merger
guidelines, but also rests on the hope of potential facilities-based
competition that may never materialize." Sen Inouye said it's now up to the
FCC "to stand up for consumers and to insist upon strong conditions to
protect competition."
http://news.com.com/AT38T,+BellSouth+merger+passes+antitrust+test/2100-1036_3-6
124785.html?tag=html.alert

* Statement by Assistant Attorney General Thomas O. Barnett Regarding the
Closing of the Investigation of AT&T’s Acquisition of Bellsouth
"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. The Division investigated all
areas in which the two companies currently compete ­ including residential
local and long distance service, telecommunications services provided to
business customers, and Internet services ­ and the merger’s impact on
future competition for wireless broadband services. The presence of other
competitors, changing regulatory requirements and the emergence of new
technologies in markets for residential local and long distance service
indicate that this transaction is not likely to harm consumer welfare. The
proposed acquisition does not raise competition concerns with respect to
Internet services markets or ‘net neutrality’. The merged firm would
continue to face competition from other facilities-based rivals in the
provision of telecommunications services to business customers including
local private line services. The combination would not significantly
increase concentration in the ownership of spectrum in any geographic area
or give AT&T control over a large enough share of all spectrum suitable for
wireless broadband services to raise competitive concerns. Finally, the
merger would likely result in cost savings and other efficiencies that
should benefit consumers."
http://www.usdoj.gov/opa/pr/2006/October/06_at_692.html

Criticism of DoJ Decision
* Justice OK's AT&T/BellSouth Merger
Media consolidation critic Jeff Chester, of the Center For Digital
Democracy, was neither surprised nor pleased with the decision: "The Bush
Administration's DOJ has surrendered the rights of the public to have a
competitive and democratic broadband media system." Big computer companies
like Google, Microsoft, Yahoo Intel and others are also concerned with the
merger, suggesting it constitutes one of the final pieces in the effective
reconstitution of the old Ma Bell. Gigi Sohn, President of Public Knowledge,
said she was concerned that the FCC will vote on the merger tomorrow as it
also considers a Notice of Inquiry (NOI) on Net Neutrality: "coupling" the
merger vote with the NOI was a "bait and switch," that will allow the FCC to
attach few or no conditions on the merger while saying they are "taking care
of Net Neutrality through the notice of inquiry."
http://www.broadcastingcable.com/article/CA6379848.html?display=Breaking+News

* Copps, Adelstein Criticize Justice's Approval Of Merger
The FCC's two Democratic regulators harshly criticized the Justice
Department for approving the $78 billion AT&T, BellSouth merger without
conditions. The department, however, said "the presence of other
competitors, changing regulatory requirements and the emergence of new
technologies" prompted its decision. "The Justice Department has packed its
bags and walked out on consumers and small businesses by refusing to impose
even a single condition in the largest telecom merger the nation has ever
seen," Commissioner Michael Copps complained in a statement. Because Justice
did not issue a consent decree, or a settlement with the parties, a combined
AT&T, BellSouth would not be subject to an automatic judicial review. "This
abdication looks suspiciously like an end-run around the public-interest
review" required under antitrust law, Commissioner Copps added. His views
were echoed by the Commissioner Jonathan Adelstein, who issued a statement
characterizing Justice's conclusions as "a reckless abandonment of
[Justice's] responsibility to protect competition and consumers." Several
observers said Justice's ruling would motivate the two Democratic FCC
commissioners to fight harder for consumer protections. But if the Democrats
push too far, Republican FCC Chairman Kevin Martin might include GOP
Commissioner Robert McDowell in the negotiations, giving the Republicans a
3-2 advantage. Without McDowell, the parties are split 2-2. Commissioner
McDowell may be recused due to his background at CompTel, which represents
Bell competitors. But sources note that Chairman Martin has the authority to
involve McDowell if the talks with Democrats reach an impasse.
http://www.njtelecomupdate.com/lenya/telco/live/tb-RONK1160597560735.html

* DOJ Defends AT&T/BellSouth Investigation
Charged by FCC Democrats with taking a dive and "reckless abandonment" of
consumers, the Justice Department Wednesday defended its decision that the
$67 billion merger of AT&T and BellSouth did not raise anitcompetitive
issues sufficient to attach conditions.
http://www.broadcastingcable.com/article/CA6380223.html?display=Breaking+News

Press Releases
* Justice Department Rubber Stamps AT&T Mega-Merger
Free Press: "The merger of AT&T and Bell South would take a big step toward
the resurrection of Ma Bell, and its magnitude demands thorough scrutiny and
careful review. Instead, the officials charged with protecting the public
interest are rubber-stamping the deal in the most irresponsible manner
imaginable. The consent decree and subsequent judicial review have been
tossed out the window. It appears the fix is in. The public interest is not
served by handing out favors to large corporations without any safeguards.
We are witnessing a wave of concentration in the telecommunications market
that threatens to sweep away the free and open Internet. Yet the watchdogs
in Washington can't be bothered to require even the most basic consumer
protections. The new AT&T wants all the market power of its old monopoly
without any consumer protections. The FCC must not sign off on this deal
without applying serious conditions that prevent discrimination and foster
broadband competition. First and foremost, this merger should not be allowed
to proceed without permanent, binding protections for Net Neutrality."
http://www.freepress.net/press/release.php?id=173

* DOJ Rubberstamp on AT&T/BellSouth Merger Recreates the MA Bell Dynasty,
Sells Out Consumers
"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 for 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."
http://www.hearusnow.org/other/newsroom/phoneservices/dojrubberstamponattbellso
uthmerger/

Additional Coverage
* Justice Dept. Approves AT&T-BellSouth Deal
http://www.nytimes.com/2006/10/12/business/12att.html
* Justice Department Criticized For Approving Big AT&T Deal
http://online.wsj.com/article/SB116058124083289458.html?mod=todays_us_marketpla
ce
* AT& T Deal Wins A Key Go-Ahead
http://www.washingtonpost.com/wp-dyn/content/article/2006/10/11/AR2006101100915.
html
* BellSouth deal faces FCC fight
http://www.usatoday.com/printedition/money/20061012/3b_fcc12.art.htm
* AT&T Gets Closer to Purchase of BellSouth
http://www.latimes.com/business/printedition/la-fi-att12oct12,1,3589829.story?coll=la-headlines-pe-business