AT&T, BellSouth Merger Denounced

'Competition is dead' warns consumer groups outraged at proposed union of AT&T, BellSouth.


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The proposed merger of AT&T and BellSouth means the death of the Internet and the unmasking of fictional competition between telecom companies, charged two Washington, DC-based consumer groups.

The Consumer Federation of America and the Consumer Union urged regulators to reject the $67 billion proposal.

The combination would give AT&T 70 million phone subscribers, more than 50 million wireless users and 10 million DSL connections, ensuring the carrier's No. 1 position.

''The fiction that a lot of competition will protect the public is dead,'' Mark Cooper, director of consumer research for the (CFA), told Internetnews.com.

''We've gone from a regulated monopoly to an unregulated duopoly,'' Cooper said, adding that the issue ''will be a major public issue''.

Cooper believes the proposal ''gives AT&T more ability to kill the Internet. They want to cableize the Internet.''

The Consumer Union was equally opposed to the blockbuster merger.

''Congress and federal regulators need to look carefully at the lifeless 'competition' their flawed policies have created and reject this merger,'' Gene Kimmelman, Consumer Union vice president for federal and international affairs, said in a statement.

Where once AT&T, MCI, SBC, Bell South, Sprint and Verizon competed for long-distance, local and wireless subscribers, the landscape has been altered by the increasing urge to merge.

With previous mergers between Verizon and MCI, the AT&T, SBC, Bell South, Cingular deal would mean the telecomm market is reduced to two larger players.

The merger plans between AT&T and BellSouth come less than two months after SBC purchased AT&T for $16 billion and adopted the AT&T name. In 1986, the U.S. Justice Department broke up AT&T into eight regional baby bells.

AT&T CEO Edward Whitacre Jr., called the move ''the next logical step that creates substantial value for customers and stockholders of both AT&T and BellSouth'' in a statement.

This article was first published on InternetNews.com. To read the full article, click here.

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