Hi Tony,
You postulate an interesting series of scenarios, but I think you need to back up and answer this one question first. What about the FCC?
The crux to any telecom merger is the FCC and how they construe these marriages. I have contended since the rumor of the GBLX/USW merger hit this thread that the FCC will view this a back-door attempt by USW to get into the long-distance game without having fulfilled any of the requirements of the 1996 Telecom Reform Act regarding opening its local area of operation to significant competition. In the business arena there are a number of data CLECs active, but for the typical residential subscriber there simply is no choice as to who the local provider will be. When testifying before the Senate recently, Sol Trujillo, USW CEO, received a very icy reception on his plea to be able to provide LD services. Especially from Fritz Hollings who went out of his way to chastise Trujillo for Trujillo's pleadings for special favors from Congress. This was a few weeks before the merger announcement and I feel confident that the mood around Washington has not mellowed since then.
As an aside, I live in Oregon and I am witnessing something that is completely new to me. USW has special legislation before the Oregon Senate right now that is having a very hard time achieving passage. For the first time that I can recall, a corporation is using radio advertising to beat the drum for an arcane state legislative proposal,SB142. The tout is that SB142 is crucial for bringing modern telephone services to rural Oregon. The hidden agenda is to impose a surcharge on our bills so that the company can build out its DSL system, starting of course in that most rural area of Portland and its suburbs. Furthermore, they want to interpose a new Commission that will run interference between USW and the Oregon PUC, two organizations that are at complete loggerheads. Finally, the bill is intended to change the rules so that USW is no longer regulated by a fixed rate of return, but rather, USW would offer a guarantee that customer service rates would never go up. In other states where more compliant PUCs have allowed this change, the fixed rate of return of 12% became an unregulated 30% after all the "emergency" upgrades were paid for by the consumers of those states. A sweet deal when you can get it. But, as those who are following the Portland decision know, Oregon has a well deserved reputation for being rather prickly when it comes to large corporations coming in and trying to bully the citizens here. One of the reasons I like it here.
The GBLX/USW merger has some prospect of success before the FCC. For the life of me, I don't see how a USW/QWST/BLS merger could ever get past Kennard and crew.
Ciao, Ry |
