Contact Center Solutions Industry News

[December 30, 2006]

Bigger AT&T comes with deals, doubts

(News & Observer, The (Raleigh, NC) (KRT) Via Thomson Dialog NewsEdge) Dec. 30--BellSouth is history.

The state's biggest telephone company will be taken over by AT&T and cease to exist as an independent entity. The merger was approved Friday by federal regulators after AT&T agreed to a host of consumer protections.

The $86 billion deal creates a giant telecom spanning 22 states, including North Carolina.

Among AT&T's concessions:

--To offer discounts, such as $10-a-month high-speed Internet access as part of a package for new customers.

--To hire 3,000 workers to fill jobs that had been sent abroad.

--To not charge Google, Yahoo and other online services premium fees to use AT&T's high-speed networks.

Consumer advocates aren't happy with the FCC decision.

"We still think it's a bad deal for consumers," said Rob Thompson, a consumer advocate with N.C. Public Interest Research Group in Raleigh. "You're seeing two of the largest phone carriers coming together and creating a monopoly that reduces competition. Generally these mergers end up with higher prices for consumers, and in the long term it's not clear it leads to any benefits."

AT&T could lay off thousands of employees as it consolidates operations, consumer advocates say. BellSouth employs 5,040 statewide and 750 in the Triangle.

When it takes over BellSouth's 1.8 million customers, AT&T will still have to answer to the N.C. Utilities Commission for the service quality and pricing of basic phone service.

But that consumer protection could be up for review. BellSouth has asked to do away with regulation so it can price services as it sees fit, instead of facing regulatory reviews and public hearings.

The state utilities commission had put off ruling on BellSouth's deregulation request while the merger was pending. The commission said the merger, which would make AT&T the nation's largest wireless carrier, could limit customer choices in wireless, long distance and other services.

Copyright (c) 2006, The News & Observer, Raleigh, N.C.
Distributed by McClatchy-Tribune Business News.
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