WATCHDOGS URGE FCC TO OPPOSE AT&T ACQUISITION
August 30, 1999
Electronic Media via NewsEdge Corporation : Washington
A coalition of watchdog groups last week asked the Federal Communications Commission and the Department of Justice to block AT&T's acquisition of MediaOne Group on grounds that the merger would give the phone company too much power.
AT&T argues that the acquisition would serve the public interest by giving the phone giant a leg up in its quest to provide competitive local phone services to consumers.
But at a press conference last week, representatives of the Consumers Union, Consumer Federation of America and Media Access Project said they fear the deal will give AT&T a stranglehold on the cable TV and Internet access markets.
``We don't think the promises are worth the costs,' said Mark Cooper, research director for the Consumers Federation of America.
Added Gene Kimmelman, a co-director of the Consumers Union, ``If this merger is not blocked, consumers will continue to see their cable rates soar and begin to face inflated prices for new high-speed Internet services.'
The consumer groups are challenging the merger with the FCC in part because they say it will give AT&T interests in cable systems passing 57 percent of the nation's cable homes. An FCC rule, which is currently under agency review and challenge in the courts, limits cable operators to owning systems passing 30 percent of the homes passed by cable.
In addition, the groups are concerned because the merger will give AT&T interests in both of the cable industry's broadband Internet services, Excite@Home and Road Runner. (AT&T already controls Excite@Home through its ownership of TCI. It would acquire the interests in Road Runner through MediaOne.)
With its interests in cable systems, broadband networks and in many of the top cable networks, the groups fear that AT&T will favor affiliates and keep competitors at bay.
``The AT&T and MediaOne merger is a blatant violation of our nation's antitrust rules,' Mr. Kimmelman said.
The consumer group representatives also alleged that the only consumers that would benefit from AT&T's local phone upgrades would be the affluent minority that subscribed to package deals including all the phone giant's planned telecommunications services, including local and long-distance telephone, cable TV and Net access.
But the majority of AT&T's cable customers could be called on to foot the bill for upgrades they don't want.
``This is not just a dollars-and-cents issue; it's an issue of democracy,' said Andrew Schwartzman, president of the Media Access Project.
Another concern of the watchdog groups is that the merger would give AT&T significant ownership and partnership interests in other key industry players, including Time Warner and Cablevision Systems Corp.
``We want all these companies to compete,' Mr. Kimmelman said.
In response, Jim McGann, an AT&T spokesman, said, ``It's rather surprising to see consumer leaders criticize a merger that is so clearly intended to benefit consumers. The whole point of the merger is to offer an alternative to the local Bell monopolies for local phone service.'
``We're not eliminating choice from any market,' Mr. McGann added. ``We're adding choice to a couple of key markets, local telephone and high-speed Internet access.'
<<Electronic Media -- 08-23-99, p. 4>> |
