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Article

Title: Pact Represents Gamble Regulators Will Accept A New Telecom Giant

Author: Squeo, Anne Marie; Schatz, Amy Article Type: Product Analysis
Source: Wall Street Journal, v247 n53 pA1(2) Publication Date: Mar 6, 2006
  ISSN: 0193-2241
URL of Publication: http://www.wsj.com

AT&T's intention to purchase BellSouth represents a big bet that regulators will approach a once-unthinkable telecommunications deal both because of the Bush administration's pro-business stance and the increasing competition phone companies now face from cable-television and Internet services.' The Justice Department has been open to big mergers in the phone industry, including those between SBC and AT&T and Verizon Communications and MCI. Blair Levin, former Federal Communications Commission (FCC) official and presently a telecommunications analyst, says the FCC's adherence to its recently merger decisions will mean that the path to merger for AT&T and BellSouth will be trouble-free. Some phone companies are already looking at ways to offer guaranteed delivery times for Internet traffic, just as FedEx guarantees package delivery. Technology companies are therefore asking Congress for laws that ensure the principle of Internet neutrality, which would ensure that all Internet traffic must be treated equitably. Cable companies increasingly offer phone service as part of consumer packages, and, says AT&T Chairman and CEO Edward Whitacre, 'AT&T wants a bigger footprint in a changing telecommunication world where competition is incredibly intense. Among topics covered is predicted skepticism over the deal at the FCC by Republicans Deborah Taylor Tate and Robert McDowell (who awaits confirmation by the Senate).

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