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DOJ Issues Second Request over AT&T, BellSouth

Doyle, Barlow & Mazard PLLC

On May 2, AT&T Inc. (“AT&T”) and BellSouth Corp. (“BellSouth”) confirmed that the DOJ had issued a second request with respect to AT&T's nearly $90 billion acquisition of BellSouth. This transaction will make AT&T the dominant phone carrier in 22 states and comes on the heels of two other large telecom deals and amid growing concern about the impact of consolidation on control of America's rapidly growing broadband communications networks. Last year, regulators approved SBC Communications Inc.'s $16 billion merger with AT&T Corp., forming ATT Inc., and Verizon Communications Inc.'s $6.75 billion takeover of MCI Inc. The Federal Communications Commission also must approve the deal.
Public comments and petitions asking the FCC to deny the merger are due June 5. In the previous two deals, the FCC imposed a “net neutrality” requirement prohibiting the merging companies from blocking or otherwise interfering with the data or voice services that, at some point in their transmission, must be carried over the big phone companies' networks. Those net neutrality provisions are in effect for only two years. Media Access Project (“MAP”), a public advocacy firm, plans to file a petition asking the FCC to either deny the merger or impose tough conditions. MAP senior vice president Harold Feld has said regulators should examine the competitive impact of putting Cingular Wireless LLC, currently an AT&T and BellSouth joint venture, under one roof. Cingular is the country's largest wireless provider.

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