FCC Adds Conditions to Bell Deals

By Caron Carlson  |  Posted 2005-11-07

The two largest bell operating Companies are in such a hurry to complete their acquisitions of the two largest long-distance carriers that they volunteered conditions that even the chairman of the Federal Communications Commission thinks are unnecessary.

The FCC last week ordered several requirements to protect competition following Verizon Communications Inc.s planned purchase of MCI Inc. and SBC Communications Inc.s planned purchase of AT&T Corp. The companies must provide stand-alone DSL service for two years, retain the rates they charge businesses for high-capacity communications for two-and-a-half years and continue "peering" with other ISPs for three years.

None of the nations four top telecommunications officials was entirely satisfied with the arrangement. FCC Chairman Kevin Martin said divestiture conditions set forth earlier by the U.S. Department of Justice adequately addressed concerns about market concentration.

"I do not believe that all of these conditions imposed today are necessary," Martin said. "In isolation, I think its clear that we all would have done this differently." Nonetheless, Martin said the mergers will spur the Bells to invest in fiber-optic networks; encourage new and advanced services; and create strong, global carriers.

But Commissioner Michael Copps argued the conditions may not go far enough. "In a sense, these mergers can also be seen as an epitaph for the competition that many of us thought we would enjoy as a result of the Telecommunications Act of 1996," Copps said.

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