FCC Delays AT&T/BellSouth Vote To Air Approval 'Concessions'

Telecom Policy Report, Oct 16, 2006

>>AT&T and BellSouth will continue to offer and won't seek any increases in state-approved rates for unbundled network elements (UNEs) or collocation facilities that are in effect when the merger closes. The companies, however, reserve the right to negotiate voluntarily agreements with other telecom carriers on different UNE or collocation rates; for 30 months after the closing date, no forbearance petitions will be filed on loop or transport UNE regulations.

>>Wire center figures, numbers of business lines and fiber-based collocations will be recalculated, ostensibly to allow previously non-qualified rival carriers to gain access. The new "non-impairment thresholds" apply to numerous loop and transport facilities, but there are some exceptions.

>>As of the closing date, there will be no increases in rates paid by existing customers of DS1 and DS3 local private line services, interstate tariffs (including contract tariffs) for special access services or existing tandem transit service arrangements. The combined company won't provide special access offerings to wireline affiliates that aren't available to "other similarly situated special access customers on the same terms and conditions" and won't "unreasonably discriminate" in favor of affiliates in establishing the terms and conditions for grooming special-access facilities.

>>Ten new trials of broadband Internet access service using 2.3 GHz or 2.5 GHz spectrum - licensed but practically unused so far by the companies - will be initiated by the end of 2007; at least five of those trials will be conducted in BellSouth's territory. Some critics believe the DoJ and the FCC should seek divestitures of the unused spectrum licenses.

>>Within 30 days of closing, a $1 million donation will be made to a foundation or to other public entities to promote public safety and disaster recovery. By June 1, 2007, "AT&T will complete the steps necessary to allow it to make its disaster-recovery capabilities available to facilitate restoration of service in BellSouth's in-region territory in the event of an extended service outage caused by a hurricane or other disaster."

AT&T and BellSouth also promised the FCC that, for three years, annual declarations will be filed that the combined company had "substantially complied" with the terms of these conditions in all material respects." The proposal also reveals that the company and regulators have discussed the possibility of further conditions on "the repatriation to BellSouth territory of jobs that had been expatriated to overseas locations" as well as Internet backbone peering arrangements, network-neutral non-discrimination, and the impact of commission forbearance decisions on any conditions that might be imposed.

Reactions To Postponement

Outside the FCC headquarters building, BellSouth and AT&T put a conciliatory face on the vote postponement. "We ran short of time to gain final approval for the merger today, which is not uncommon in these matters," it said in a prepared statement. "We look forward to the Nov. 3 FCC meeting, when we expect the FCC to complete its review, approve the merger and allow us to begin delivering the numerous benefits of the merger to consumers."