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FCC Releases Order on AT&T/Bell South Merger

3/27/2007 01:17:00 AM Eastern

The FCC has released its 181-page order approving the merger of Bell South and AT&T. The commission voted to approve the merger in December.

After the two telcos agreed to network neutrality and other conditions, the commission concluded that, "with one exception," the merger was "not likely to result in anticompetitive effects in relevant markets."

That exception was in a few buildings where the two were the only carriers of wholesale special access services, but that AT&T's pledge to divest its lines in those areas was an adequate remedy.

In its order, the FCC cited potential benefits to the merger including broadband deployment, multichannel video programming competition, national security, "efficiencies related to vertical integration," and lower costs.

On the hot-button issue of network neutrality, Bell South and AT&T have agreed, for 30 months, to hold to the FCC's nondiscrimination principles for Internet access service and to  "maintain a neutral network and neutral routing in its wireline broadband Internet access service."

Just what constitutes network neutrality has been the a point of contention, but in this case it means "[an] agreement not to provide or to sell to Internet content, application, or service providers, including those affiliated with AT&T/BellSouth, any service that privileges, degrades or prioritizes any packet transmitted over AT&T/BellSouth’s wireline broadband Internet access service based on its source, ownership or destination."

That commitment does apply to virtual private networks (VPN) or to IPTV service, except that such prioritizing cannot then degrade the service of other Internet customers.

AT&T and Bell South agreed to various conditions to help get the merger passed a 2-2 commission after Republican Robert McDowell decided he was unable to vote given his previous job with telco association Comptel, which had weighed in on the merger, and what he thought was less than a green light from the FCC's general counsel's office for his participation.

FCC Chairman Kevin Martin has made it clear that the conditions are merger-specific and not precedent for general commission policy.

November