FCC APPROVES MERGER OF AT&T INC. AND
Significant Public Interest Benefits Likely to Result
Washington, D.C. – The Federal Communications Commission today
merger of AT&T Inc. (AT&T) and BellSouth Corp. (BellSouth).
The Commission concluded that significant public interest benefits are
likely to result
from this transaction. Benefits to consumers include:
• Deployment of broadband throughout the entire AT&T-BellSouth in-region
territory in 2007.
• Increased competition in the market for advanced pay television
AT&T’s ability to deploy Internet Protocol-based video services more
than BellSouth could do so absent the merger.
• Improved wireless products, services and reliability due to the
by unified management of Cingular Wireless, which is now a joint venture
operated by BellSouth and AT&T.
• Enhanced national security, disaster recovery and government services
the creation of a unified, end-to-end IP-based network capable of
efficient and secure government communications.
• Better disaster response and preparation from the companies because of
The Commission’s analysis of competitive effects focused on six key
• Special access competition. The record indicates that, in a small
buildings in the BellSouth in-region territory where AT&T and BellSouth
only carriers with direct connections, and where entry is unlikely, the
likely to have an anticompetitive effect. The Commission found that a
commitment by AT&T to divest indefeasible rights of use (IRUs) to those
facilities adequately remedied the competitive harm. The Commission
found that the merger was not likely to result in anticompetitive
respect to other special access services that combine one carrier’s own
with those of another.
• Retail enterprise competition. The Commission found that the merger
likely to have anticompetitive effects for enterprise customers, even
Applicants currently compete against each other with respect to certain
enterprise services and some classes of enterprise customers. The
found that competition for medium and large enterprise customers should
strong after the merger because medium and large enterprise customers
sophisticated, high-volume purchasers of communications services and
there will remain a significant number of carriers competing in the
• Mass market voice competition. The Commission concluded that the
not likely to have anticompetitive effects in the mass market. The
found that neither BellSouth nor AT&T is a significant present or
participant in this market outside of their respective regions.
Commission found that neither party was exerting significant competitive
pressure on the other in their respective in-region territories. The
further noted that the rapid growth of intermodal competitors –
telephony providers (whether circuit-switched or Voice over IP
(VoIP))– is an
increasingly significant competitive force in this market, and
competitors likely will play an increasingly important role with respect
mass market voice competition.
• Mass market Internet competition. The Commission found that the merger
likely to result in anticompetitive effects for mass market high-speed
access services. Specifically, the Commission concluded that the merger
no horizontal effects for these services because neither BellSouth
provides any significant level of Internet access service outside of its
region. The Commission also concluded that, while the merger may
some vertical integration, the record did not support commenters’
the merged entity will have the incentive to act anticompetitively in
market high-speed Internet access services market.
• Internet backbone competition. The Commission concluded that the
likely to result in anticompetitive effects in the Internet backbone
Commission found that the merger is not likely to cause the Tier 1
market to tip to monopoly or duopoly, nor is it likely to increase the
incentive and/or ability to raise rivals’ costs.
• International competition. The Commission found that the merger is not
result in anticompetitive effects for international services provided
market, enterprise, or global telecommunications services customers. The
Commission also concluded that the merger is not likely to result in
anticompetitive effects in the international transport, facilities-based
international private line markets.
• In addition, on December 28, 2006, AT&T made a series of voluntary
commitments that are enforceable by the Commission and attached as an
Appendix. These conditions are voluntary, enforceable commitments by
but are not general statements of Commission policy and do not alter
precedent or bind future Commission policy or rules.
Action by the Commission, and effective upon adoption, Friday, December
29, 2006, by
Memorandum Opinion and Order. Chairman Martin and Commissioner Tate,
Commissioners Copps and Adelstein concurring, and Commissioner
Docket No.: 06-74