AT&T Offering Merger Concessions

TheFarmerInTheDell writes that AT&T is offering concessions to make their merger with SBC happen as fast as possible. From the article: "AT&T filed a letter of commitment with the [Federal Communications Commission] Thursday night that adds a number of new conditions to the deal, including a promise to observe 'network neutrality' principles, an offer of affordable stand-alone digital subscriber line service and divestment of some wireless spectrum."

Comments

Don't forget the fine print.

[DraconPern]

affordable stand-alone digital subscriber line service * pricing only valid for the first three month of contract.

But

[JustOK]

TechDirt is pointing out that

The wording is a little tricky, but while they agree not to remove network neutrality from their standard network, hidden in the middle of a later paragraph is this sentence: "This commitment also does not apply to AT&T/BellSouth's Internet Protocol television (IPTV) service."

and

AT&T promises not to violate network neutrality on a network they never intended to use that way, and carves out permission to use it on their new network, where they had planned all along to set up additional tollbooths.

Yay, AT&T!

SBC != BellSouth

[plaiddragon]

SBC already merged with AT&T. It is this AT&T that is now offering concessions to get the merger with BellSouth to go through.

Re:SBC != BellSouth

[Umbral Blot]

One network to rule them all, One network to find them,
One network to bring them all and in the darkness bind them

Re:SBC != BellSouth

[ffejie]

They actually bought them for the backbone and the services that come with it. SBC had no internet backbone previous to the SBC acquisition and as a result was using Sprint (in many cases) for transport to the internet. This is pricey, especially with all those DSL users. Classic AT&T has a great managed internet service for companies, very profitable VPN services and a ton of business VoIP customers. Once SBC bought AT&T, they could use their backbone and become a legitimate Tier 1 Provider -- and immediately bought legitimacy into the lucrative B2B internet service world.

However, typo remains -- this article is about BellSouth, not SBC. Some argue that this BellSouth "merger" is mostly to put Cingular under one roof. I agree. The rest of BellSouth isn't that valuable to the new AT&T. Cingular is generating a lot of money for the two companies and consolidation is in the companies best interest.

Re:SBC != BellSouth

[uhlume]

...

Would that be a Tolkien-ring network?

Welcome Back Ma Bell

[allscan]

Wow, and to think the Antitrust suit from the 70's against AT&T was supposed to break up the monopoly. Now they are coming back strong http://en.wikipedia.org/wiki/The_break_up_of_AT%26 T.

Re:Welcome Back Ma Bell

[silentounce]

Maybe that industry "wants" to be a monopoly. You can't turn a pig into a chicken by gluing feathers on him, eventually they'll fall off. By the way, antitrust laws are not intended to break up monopolies. They are there to deter and punish only certain anti-competitive actions. The laws were put into place for mostly political reasons. Many economists are against them.
 
Monopolies or oligopolies aren't all bad in some industries, sometimes they are the most efficient market structure. I'm not saying that the telecom industry is one of these, but there is a reason that after several breakups that they just coming back together. The same thing has happened in the airline industry. Any industry that demands a very large infrastructure will always lean toward a non-competetive market structure because the "cost to play" is so high.

Re:Welcome Back Ma Bell

[arclyte]

I call bullshit on this one.

It's not the "industry" that wants a monopoly, it's the management of this industry. Industry itself has no self-organized will to monopolize. Monopolies are inherently anti-competetive. The reason Ma Bell was broken up in the first place was to protect consumers. It is inherently in the best interest of these companies to raise the "cost to play" once they've formed a monopoly in order to keep small players out and thus kill off competition. Once you're the only provider, you can afford to pay whatever outrageous fees are needed because consumers have no choice but to pay you for service. Look what happened when the government recently removed the Universal Service Fund fee and the big telcos moved to fill that gap to help pay off their taxes. And they're still getting away with "tax recovery" fees, passing on their social responsibility to their customers in order to bolster their bottom line. Can I get a raise of hands here on how many people find today's cable or telco companies (land-line or cell) doing all they can to respond to market pressure and consumer demand instead of just filling their own pockets?

But hey, if you want to go back to renting phones, be my guest...

Re:Welcome Back Ma Bell

[OffbeatAdam]

I can hardly attribute the recent merger and conglomeration of AT&T as a bad thing. I see it like this: 60 years ago as our country was coming out of a war that pushed technology to advance at the rate it is currently moving at today, AT&T stepped up with Bell Labs to convert that push into a very large, very succesful invention push that brought this country far ahead of our overseas brethren in terms of accomplishment and overall technological capability. If not for AT&T and its Bell Labs, we would not have the transistor, C (programming), UNIX... in reality, AT&T is the creator of the modern programmable computer. TDMA and CDMA, Fiber Optics, LEDs, CCDs. Bell Labs is pretty much the forefront of the technological community. The antitrust suit, although directed in a manner to allow AT&T to step into the computer arena and step slightly out of the phone arena, made bell labs cripple. In the past 10 years, the US has fallen behind in telecommunications. Things that we are just getting into our infrastructure, countries overseas have had for years. Our average broadband speed is less than 1/10th than the majority of other places in the world. We will not advance, if we do not embrace what advanced us in the first place. The exploration and implementation of new and powerful technologies country-wide to advance our infrastructure to handle and drive a more powerful nation, is expensive. How can you expect a bunch of small local companies with less capital than a fast food restaraunt to accomplish such a large task? If we are to meet broadband capabilities and the HDTV forecast, we need to accept that only a large, rich, powerful company can accomplish it. AT&T's antitrust suit was primarily due to their advancement into the computer industry. After the suit, their worth dropped SIGNIFICANTLY. The baby bells were nearly worthless, with the exception of SBC and BellSouth. The only others, were in too small of areas to really compete. Although there are a few others, the AT&T breakup is probably the biggest disagreement I have with some of the antitrust decisions of the last 100 years.

Re:Welcome Back Ma Bell

[Bryansix]

Right. And this is why the people (Read: Government) should own the lines themselves and only allow telecoms to run services on them. If you think that is a bad idea then you have to go the regulation route and basically force the telecoms to get their grubby hands off the lines they "Own" (Read: The taxpayers paid for most of those lines) and to let any service provider into any region. This way while one player in the market may own the infrastructure, it is not of benefit to them because they are forced to offer that infrastructure at cost to the competition. Will the Telecoms have a fit at hearing these plans? Yes. But seriously who cares. This is for the good of the country and once again it was the people of this country who subsidized most of those lines in the first place. We should get to use them how we like.

Re:Welcome Back Ma Bell

[pauljlucas]

Can I get a raise of hands here on how many people find today's cable or telco companies (land-line or cell) doing all they can to respond to market pressure and consumer demand instead of just filling their own pockets?

Everything else aside, the old Bell Telephone network was the best in the world. Because the old AT&T was a monopoly, they could afford to engineer things right. They didn't have to worry about pesky things like cost-cutting or meeting next quarter's financial goals. Today's land-line service is still the best in the world, but it's due to the old AT&T legacy. When older equipment starts getting replaced, expect the quality of land-line service to decline.

If AT&T were never broken up, we'd probably have the best wireless service in the world today. Short of accident or disaster, you'd never get a dropped call. And we'd have one, unified technology, not the incompatible technologies of CDMA, TDMA, GSM, and iDEN.

Re:Welcome Back Ma Bell

[pauljlucas]

Are you suggesting that we are still using Ma Bell-era switches? Because I doubt that.

There are lots of 1A-ESS and 5ESS switches still in operation. Lots. Additionally, AT&T continued to manufacturer switches for many years after the break-up and sold them to the baby bells. I know. I worked for AT&T at the time.

Re:Welcome Back Ma Bell

[drinkypoo]

There are lots of 1A-ESS and 5ESS switches still in operation. Lots. Additionally, AT&T continued to manufacturer switches for many years after the break-up and sold them to the baby bells. I know. I worked for AT&T at the time.

Well, that does make sense. And the 5ESS does predate the end of the breakup of ATT by two years, so I guess that works. I sit corrected.

That ain't no concession

[Jah-Wren Ryel]

including a promise to observe 'network neutrality' principles,

That's not a concession - that's an attempt to head off binding legislation with a 'promise' that is easily broken once the merger is past the point of no return. They want to have their cake and eat it too.

Re:That ain't no concession

[mgbastard]

FTA:

A greater commitment to network neutrality, or nondiscrimination involving Internet traffic. AT&T said it would "maintain a neutral network and neutral routing in its wireline broadband Internet access service" for two years.

Two years? Hah. That's so paltry, we should all feel insulted. They probably wouldn't even be able to effect the major technology change on their network to disrupt neutrality for that long anyway. Might as well promise according to plan. That promise should be perpetual and binding.

All of their promises, excepting the 2.5ghz auction are without substance, and that is suspect. They had already announced repatriating those jobs. Naked DSL for a whopping 30 months. Whew whee! So they'll get more people accusomted to broadband phone and tv services, and then take away the network neutral, unbundled option, forcing them on to their bundle after 30 months. At least we know their marketing strategy! I don't really understand why they are willing to cede the 2.5ghz... best guess is they intend to acquire that 'unrelated' entity after they build out sites on that 2.5ghz wimax. That goodwill asset booked on mystery carrier X will underwrite a lot of financing of cell sites!

Slimeball business monopolists. (eat me)

Re:merger.

[homey of my owney]

We're all taking part in this merger. In the short time since divestiture, the Bells, MCI, Sprint and the like, have gone from an incredibly profitable business model, to one far less stable. The irony of divestiture is that local phone service still has almost no competition, but the threat to the Bells comes from new communications that were not very formidable back then. Cable, which now shares the 'mother' moniker in most places in the US, stands to be affected most by a strong Bell presence. Hopefully, the competition will bring the benefits divestiture was supposed to deliver.

Some 'consession'....

[trianglman]

A two year commitment to net neutrality is just a bunch of hot air, if consumer advocacy groups accept something like this they have obviously been drinking the kool-aid. Net neutrality to be reviewed in two years and would need to be revoked would be a concession, this needing to be reinforced two years from now is nothing.

Not to mention the other bs in this agreement:
$20 DSL for consumers whether they sign up for other services or not - when you are an effective monopoly in the area, does it matter if signing up for other services is required?
Repatriate 3,000 outsourced jobs - when you are dropping 10,000 jobs, 3,000 is a drop in the bucket.
And, going back to the net neutrality clause, 'AT&T said it would "maintain a neutral network and neutral routing in its wireline broadband Internet access service"' - sounds to me like they are trying to leave all sorts of wiggle room here...

Which is it?

[PingSpike]

...including a promise to observe 'network neutrality' principles...
But I thought network neutrality was bad for consumers last time we asked the telcos?

Re:Which is it?

[MECC]

It is. It'll make you sterile, cause your hair to fall out, your car to quite working, give you AIDS, your pants will hike up to your shins, your socks won't match, you'll get bad breath, and your watch will quit. I know this because I saw it on TV.

I promise I'll pull out...

[TheWoozle]

...c'mon baby!

It sounds like the FCC needs to invoke the "no glove/no love" rule.

Re:georgewellian mindphucking to continue in 2007?

[slughead]

Wow dude, you are just f*cking batsh*t nuts, aren't you?

Most of these 'concessions' sunset after 40 months

[ShieldWolf]

Observing network neutrality for 3 1/4 years is not a concession it's just an inconvenience, after the time is up they can start building the internet toll road they have been dreaming of for years.

Politicians always agree to these dumb time limits without thinking long term. The internet will be around for a hell of a lot longer than 40 months and they should understand that - the telcos sure as hell do.