DOJ Rubberstamps Massive Telecom Merger
by Matt Stoller, Wed Oct 11, 2006 at 12:38:23 PM EDT
This is stunning news. The Justice Department has OK'd, with a simple press release, a massive merger between Bellsouth and AT&T with no conditions and without a consent decree or judicial review, effectively reconstituting much of the old AT&T monopoly. The new AT&T will control nearly half of the landlines in the country, and the CEO of AT&T is already on record essentially saying he's going to get rid of net neutrality.
Over the past decade, there has been a wave of telecom mergers, and these have concentrated the telecommunications business quite radically. Prior to a merger, the DOJ usually goes through with consent decree in which it describes possible concerns and conditions for a merged entity, which are then reviewed by a judge. That's what both Republican and Democratic Congressmen asked the Department of Justice to do in this case as well.
Two influential senators urged the FCC and Justice Department to consider imposing conditions on the proposed AT&T and BellSouth telecommunications merger.
In a letter to both agencies, Sens. Mike DeWine, R-Ohio, and Herb Kohl, D-Wis., said divestitures of company assets may be needed, along with curbs on the ability of the merged parties to "warehouse" spectrum, thus restricting it from competitors.
They also offered this warning: "The significant expansion in size and scope heralded by this merger makes it important for your agencies to be mindful of the general competition policy concern" of maintaining open markets.
Their proposals are at odds with last week's recommendation from Republican FCC Chairman Kevin Martin that no conditions be placed on the transaction, which would create the nation's largest telecom company.
Meanwhile, two House members -- Judiciary Committee Chairman James Sensenbrenner, R-Wis., and John Conyers of Michigan, the panel's top Democrat -- urged Justice to refrain from ruling on the merger until a court review of two previous telecom deals is complete. Under the so-called Tunney Act, the U.S. district court in Washington is automatically reviewing the MCI-Verizon Communications and AT&T-SBC Communications mergers.
This move, to sidestep judicial review of this merger, is a slap in the face of Senator Dewine and Congressman Jim Sensenbrenner, who already had his Judiciary committee's jurisdiction stripped by Hastert and Barton earlier in the net neutrality fight. This is the equivalent of one of Bush's signing statements, where he simply goes around the regular legislative process. This is a slap not only at Republicans and Democrats in Congress, it's also a slap at the Judicial branch, which the DOJ has stripped of power, because judges have shown an unwillingness to accept the idea that concentrating power like this has no anticompetitive effects.
The last check on this merger is the FCC, which may make its decision tomorrow. The FCC needs to include net neutrality provisions as part of the merger conditions, or else AT&T is going to begin its massive merger and planned capital expenditures with the understand that it can discriminate against content. Write the FCC using this tool provided by Freepress. You can find out a lot more about the AT&T-Bellsouth merger here: http://www.freepress.net/att/