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A Clear Path to Consolidation

While many committee members from both parties lavished praise on the executives and their plans, a skeptical few wondered how the shakeout would be beneficial.

Gazing at the long table at which the six executives were seated side by side, Rep. Anna G. Eshoo (D-Calif.) mused that "in a few years, we might only need a desk."


Edward E. Whitacre Jr., from left, of SBC Communications, David W. Dorman of AT&T, Ivan D. Seidenberg of Verizon Communications, and Michael D. Capellas of MCI attend yesterday's hearing before the House Energy and Commerce Committee. (Bill O'leary -- The Washington Post)

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Rep. Heather A. Wilson (R-N.M.) warned of an "emerging duopoly" of one cable company and one phone company providing high-speed Internet access in most communities.

Wilson also cited financial research showing that if the mergers are approved, SBC and Verizon would together control 68.4 percent of consumer wired telephone lines, 75 percent of revenue from wired and wireless lines used by the federal government, and 79 percent of revenue collected for business long-distance and data services.

Seidenberg and SBC chief executive Edward E. Whitacre Jr. quickly challenged the data as inaccurate but said they had not seen it and provided no alternative numbers.

Rep. Edward J. Markey (D-Mass.) said the mergers are the result of lobbying designed to reduce competition.

"In college basketball, to reach the Final Four, teams have to compete to defeat their opponents; they don't get to merge with them in order to move on," Markey said. "The Bell companies have employed non-market strategies -- in the courts, in Congress, and ultimately at the commission -- to beat AT&T and MCI and compel them into these mergers."

Markey asked Whitacre and Seidenberg for pledges that they would not raise rates. The executives declined, though they said they had no immediate plans to do so.

Whitacre also said he would oppose conditions on the merger that would guarantee access to his networks by competitors.

Currently, phone companies must allow rivals access to their lines to provide high-speed DSL Internet service. Cable companies have no such requirements, and the phone companies are pushing the FCC to give them equal footing.

Under questioning from several members from rural areas, where high-speed Internet services often are unavailable, the executives said they would try to do better.

Gary D. Forsee, chief executive of Sprint, said he expected a new generation of wireless technology that would cover broader geographic areas would be deployed within the next few years.

The six executives also called on Congress to remove regulations that they said were out of date, a view echoed by many committee members.

After the executives finished, Mark N. Cooper, director of research for the Consumer Federation of America, told the committee that the proposed mergers threaten to return the country to an era of monopoly control once enjoyed by AT&T.

He noted that the four regional phone companies refuse to compete against each other for local, long-distance or Internet services. With the cable industry equally concentrated, Cooper said, consumers face the likelihood of fewer choices and higher prices.

Two academics and a financial analyst who testified supported the mergers.


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