Fortune 1000 Companies Say SBC/AT&T and Verizon/MCI Mergers Will Raise Prices, Reduce Innovation and Service Quality; University of Connecticut Survey Sponsored by ACTel Finds Significant Merger Concerns Among Enterprise Customers

Business Wire, Sept 13, 2005

WASHINGTON -- An independent survey conducted by the University of Connecticut Center for Survey Research and Analysis (CSRA) and commissioned by the Alliance for Competition in Telecommunications (ACTel) finds that Fortune 1000 companies believe the proposed mergers of SBC/AT&T and Verizon/MCI will have a strong negative impact on pricing, innovation, quality of service, and levels of competition in the business telecom marketplace.

The CSRA survey, "Views of The Proposed AT&T/SBC and MCI/Verizon Mergers: From the Perspective of Fortune 1000 AT&T and MCI Customers," was conducted from July 21 to August 22, 2005. The goal of the survey was to candidly assess the attitudes of America's largest businesses on the impact of the proposed mergers.

In a random sample, CSRA interviewed 100 telecom managers from the Fortune 1000. A key parameter was to target Fortune 1000 companies that currently use services from AT&T and MCI, and thus would be most affected the market's loss of AT&T and MCI as independent companies. Of the Fortune 1000 companies interviewed, 79% were AT&T customers and 49% were MCI customers.

"Fortune 1000 companies are seriously concerned about the impact of the mergers on rates, innovation and service quality," said Heather Gold, Senior Vice President of Government Relations at XO Communications, a member of ACTel. "The most damning aspect of the survey findings is that these fears are expressed by AT&T's and MCI's own customers. This should be a wakeup call for policymakers - The marketplace is not happy with these mergers."

Highlights of the CSRA Survey

--The Fortune 1000 are keenly aware of the proposed mergers and government review. Nearly all respondents (95%) are aware of the proposed mergers of SBC/AT&T and Verizon/MCI, and a similar number (92%) know that the government is now reviewing the mergers.

--The Fortune 1000 value the benefits of a competitive telecom market. 85% of respondents said that increased telecom competition has been very beneficial to their companies.

--Most of the Fortune 1000 see themselves as worse off after the mergers. By a two to one margin those companies that have an opinion about the proposed mergers believe they will be worse off after the mergers go through. Two-thirds say that rates, innovation and service levels are better now than they would be if the mergers are approved.

--Levels of concern are high. The Fortune 1000's assessment of the mergers is serious enough that roughly two-thirds of telecom managers who are customers of AT&T and/or MCI express concerns about the mergers. 62% express concern about rising rates; 61% express concern about deteriorating quality; and 67% are concerned about the decrease in competition resulting from the mergers.

"Based on what our own customers tell us, and on our detailed econometric studies, ACTel has long known that the proposed mergers are bad for the business community," said XO's Heather Gold. "The CSRA survey is the first-ever independent research of enterprise business attitudes toward the mergers. The survey results conclusively show that the concerns of America's largest companies about the proposed SBC/AT&T and Verizon/MCI mergers mirror those of ACTel."

Copies of the CSRA survey are available at www.allianceforcompetition.com.

About ACTel

The Alliance for Competition in Telecommunications (ACTel) represents leading providers of competitive communications services and IT solution providers that have joined together to challenge the mergers of SBC/AT&T and Verizon/MCI, which if consummated as proposed will create significant harms to the public interest - reducing choice, elevating costs to customers, and slowing innovation. Information on ACTel is available at www.allianceforcompetition.com.