Thursday, December 21, 2006

McDowell says he won't vote on the AT&T-BellSouth deal

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I remember posting about a year ago, about SBC's takeover of AT&T for close to $20 billion. If we then watched in wonder on how big the telecommunications industry is in the U.S (and around the world, of course), this is how big it can get. The new AT&T made a $86 billion (!!!) bid to buy BellSouth Corp. sometime back and was approved by the Justice Department without any conditions in Oct. 2006.

While we all know of the tremendously large potential cost savings that this merger could result in for these giants, we also must remember, as consumers, the reduction in price-based competition that seems obvious at this point.

However, the deal faces certain obstacles at this point, with telecommunications lawyer Robert McDowell said yesterday that he is not going to vote on the deal because of ethical concerns. The 5-member commission with 2 Democrats pusing for certain conditions and 2 remaining Republicans opposing them, was depending on McDowell's vote to decide.

Why this deal and McDowell's stance is interesting to me is, now the deal might not be allowed to happen under these conditions, but might require AT&T to abide Net-Neutrality conditions. This means that the firm must treat all Internet traffic equally, and is something that the Democrats are pusing for, and something that we've spoken frequently in this blog.
AT&T is working hard with the the FCC to get the deal approved and bring the merger review to a bipartisan completion as soon as possible.



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