WASHINGTON — News of the blockbuster AT&T-BellSouth merger that would
combine the nation’s first and third largest telecommunications firms is
drawing bipartisan yawns inside the Beltway.
Having just recently approved the mergers of SBC-AT&T, Verizon-MCI and Sprint-Nextel — with remarkable speed and a feathery regulatory
touch — neither the Bush administration nor Congress is likely to break a sweat over this one.
It’s not the Republicans’ way or, for that matter, the Democrats’, in
the free-market Washington of today.
Mergers? Get over it, they happen. Higher prices? Maybe. Or, maybe not.
Trust the market, baby. Who knows?
Since the Bush Department of Justice (DoJ) abandoned the opinion of Bill Clinton’s DoJ that Microsoft should be broken up, antitrust fervor in Washington has disappeared.
Sen. Daniel Inouye, the Democratic doyen of the Senate Commerce Committee,
did somberly remind his colleagues the merger deserves “careful and exacting
review,” but allowed that the whole thing “is not unexpected given the changing
nature of the communications marketplace.”
House Commerce Committee Chairman Joe Barton (R-Texas) said Wednesday there
“might” be some hearings but, overall, he didn’t see any red flags attached
to the proposed merger.
About the only folks on Capitol Hill really yapping about the $67 billion
stock deal are consumer groups.
Locked in a 20th-century steel cage death
match with the Bells over local phone rates, the Consumers Union and the
Consumer Federation of America (CFA) simply refuse to believe anything good
can come of the merger.
Maybe nothing will, but it’ll hardly hurt competition in the broadband
market, which is the central question that the DoJ and the
Federal Communications Commission must decide.
According to the latest numbers from the Telecommunications Industry
Association (TIA), there are 22.5 million Americans using cable modems with
another 17 million connected to the Internet through DSL.
The Bells, though, are surging. For the first time, more new broadband
subscribers signed up for DSL than for cable Internet service in 2005.
“The fiction that a lot of competition will protect the public is dead,”
Mark Cooper, director of consumer research for the CFA, curiously told
internetnews.com earlier this week.
Just exactly how are two competitors instead of one for consumer broadband
service bad for the public? Three competitors, of course, would be better
than two, but that’s coming also in the form of wireless, satellite and power-line broadband.
“We’ve gone from a regulated monopoly to an unregulated duopoly,” Cooper
said.
Twenty years ago, wasn’t the goal of breaking up the original AT&T to bring
more competition to the market?
Back then, there was the American Telephone & Telegraph (AT&T) Company, the
venerable government-approved and regulated local and long-distance
telephone service monopoly widely known as Ma Bell.
The old lady, suffering from acute divestiture, died in 1984, leaving behind
her Regional Bell Operating Companies (RBOCs): Nynex, Bell Atlantic,
BellSouth, Southwestern Bell, US West, Pacific Telesis and Ameritech.
The Baby Bells immediately began eating each other in a series of mergers to meet the challenge of cable companies such as Comcast
and Time Warner, which offered consumers packages of voice, video and data.
Cable prices, however, stayed high until the surviving sons of the Bells
could roll out DSL service packaged with local and long-distance
calling plans. The Bells now plan to offer a competitive pay television
service to the cable using IP — IPTV.
So the cable industry is going after the Bells’ traditional telephone
business by using technology, such as Voice over IP
prices. The Bells, in turn, are targeting cable television customers with an
IPTV package that costs less than cable.
This is known as competition.
Perhaps the consumers didn’t get the memo from Verizon political swami Tom
Tauke, who once famously defended the Baby Bells’ refusal to share their
new, glossy, fiber-optic high-speed lines at discounted rates with
competitors as “Old lines, old rules. New lines, new rules.”
In Washington, lawmakers and regulators certainly got it.
