AT&T wins backing on BellSouth merger

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AT&T, the largest US telecommunications group, on Friday won Federal Communications Commission approval for its planned merger with BellSouth after offering new concessions designed to break a regulatory deadlock over the $85bn deal.

The new concessions are seen as a significant climbdown by AT&T. It had wanted to complete the merger before the end of this year, but had been frustrated by the FCC, which has been deadlocked over the issue for three months.

Robert Quinn, AT&T’s senior vice-president, described them as being “significantly more extensive than those submitted on October 13”.

AT&T promised not to raise prices on some special access lines that provide high-capacity phone and data services for large businesses for four years and to sell DSL internet access to subscribers for $19.95 a month without requiring customers to buy phone service.

In addition, AT&T said it would refrain from charging companies such as Google premium fees for faster subscriber access – a significant concession to the mostly Democrat backers of so-called “network neutrality”.

AT&T also offered to repatriate 3,000 BellSouth jobs now outside the US, pledged 200 jobs for New Orleans and to divest some wireless licences in BellSouth’s nine-state region that cover airwaves suitable for wireless broadband internet services.

AT&T’s proposed merger already had the backing of Kevin Martin, the FCC chairman, and fellow Republican Deborah Taylor Tate, but the panel’s two Democrats, Michael Copps and Jonathan Adelstein, had demanded further concessions, including price controls.

Their position was strengthened by the prospective change of control in Congress following the November elections and the decision last week by the fifth commissioner, Republican Robert McDowell not to participate in discussions and the vote because of his earlier work as a telecommunications lobbyist representing some of AT&T’s rivals.

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