Stephen Labaton has this article in today’s New York Times that recaps the real legal impact of the AT&T-BellSouth merger; namely that although the antitrust authorities will likely green light the deal, AT&T could pay a political price in telecom reform legislation. Specifically, the deal could weaken the upper hand the phone companies have had lately in warding off net neutrality rules, gaining relaxed video franchising requirements and limiting municipalities’ ability to mount broadband competition.
But the continued consolidation of the telephone industry that the latest deal contemplates gives the phone companies’ opponents significant political leverage in all three debates — and for the time being, could make it harder for AT&T and Verizon, the two largest phone companies, to prevail on all fronts.
One interesting point that Labaton makes is that AT&T Chairman Ed Whitacre, in his infamous Business Week “they’re-my-pipes” interview said that a BellSouth acquisition wasn’t in the cards because regulators wouldn’t sanction it. Here’s the original quote:
It sure would be nice, but it doesn’t have much chance of happening because of market power, size, etc. I think it would be real hard to do. I don’t think the regulators would let that happen, in my judgment.
While it’s a nice rhetorical knife to throw at AT&T, Whitacre’s earlier belief that regulators would bar an AT&T-BellSouth merger doesn’t really mean much.
Cynthia Brumfield at 8:41 AM|Comments(0)
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