Oct 13, 2006

[US] Merge Almost But Not Quite

AT&T, Inc. logoBellSouth logoThe proposed merger between US telecomunications giants AT&T, Inc. (formerly SBC) and BellSouth met one final hurdle this week after quickly gaining approval from the US Justice Department.

As reported across the web on Google News and other sites (just try a Google News search for either [AT&T] or [BellSouth] to see for yourself), the problem now is in the FCC. Originally they were scheduled to meet regarding the merger today, October 12 in the US, but announced the deciding vote has been moved to Friday, or potentially even farther off than the 13th.

Cingular Wireless logoMost news agencies agree that the delay is most likely triggered by FCC Chairman Kevin Martin trying to buy more time to convince other members of the 5 man committee to support the merger as well, having met strong resistance from the two democrat members. Many groups argue that the deal requires more pro-consumer restrictions and concessions prior to allowing it to go through given this is perhaps the largest merger of the year in the US telecommunications industry. AT&T, Inc. and BellSouth both own portions of Cingular, currently the largest wireless company in the US and bringing the two together will ensure that only one company controls the wireless phone service provider. This is not counting their combined assets in the traditional telephone market, DSL services and VOIP telephony as well.

Personally, the deal is highly ironic given all the effort the US Justice Department once put into breaking up "Ma Bell," the former AT&T, back in 1984 because of their being a monopoly. Now just over 20 years later, AT&T is on the move to rejoin with its "Baby Bell" offspring to once again dominate the US telephone market. Are things truly that different not compared to before? Well, it's hard to say. With all the changes made in the US telecommunications market over the years such as the rise of wireless services and the proliferation of consumer VOIP solutions as well, having a traditional landline is just not that essential anymore.

However, given the wide range of services this even larger AT&T, Inc. will be capable of supporting after the merger, I'm sure other competitors in the affected industries are definitely not going to just idly by as the two giants attempt to join forces.

Let's see how Friday's vote turns out before closing the book on this one.

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