Mergers Raise Concerns Over Internet Access
Wednesday, February 16, 2005; Page E01
On the surface, the frenzy of telecommunications mergers in the past few weeks raises relatively clear-cut questions for lawmakers and regulators who will be weighing the deals: Will consumers and businesses be harmed if long-distance choices disappear when AT&T and MCI are swallowed by telephone giants SBC and Verizon?
So far, there is no organized group calling for the rejection of Verizon Communications Inc.'s buyout of MCI Inc. or SBC Communications Inc.'s purchase of AT&T Corp. Instead, in a process that could last a year or more, several organizations said they will press regulators to place conditions on the mergers to help ensure robust Internet competition.
For many consumers, wireless service is a substitute for traditional local and long-distance phone service. Under the administration of outgoing FCC Chairman Michael K. Powell, phone line discounts were eliminated, making it difficult for companies such as MCI, AT&T and smaller players to offer local service over local phone company lines.
Meanwhile, the local phone giants were allowed to enter the long-distance market. Together, these government moves caused the MCIs and AT&Ts of the world to begin withdrawing from serving residential customers. As a result, experts said, regulators would be hard-pressed to reject mergers that eliminated local phone service competitors that already had decided to leave the market because of government policies.
But MCI and AT&T are major providers of "Internet backbone," the large pipes that carry data around the world in the same way that interstate highways are the arteries for long-distance car traffic.