TELECOM Digest OnLine - Sorted: A Thought About the Merger For CLEC's, ISP's, and VoIP

A Thought About the Merger For CLEC's, ISP's, and VoIP

Jack Decker (jack-yahoogroups@Withheld)
Tue, 01 Feb 2005 01:22:51 -0500

I just want to say one thing about the proposed AT&T-SBC merger, just
to give those of you who are with CLEC's, ISP's and VoIP providers a
little food for thought. Think back to when Time-Warner merged with
AOL. As a condition of FCC approval, the new company had to agree to
several restrictions, that in essence allowed customers to choose an
ISP other than AOL if they so desired. Normally, this would be a
condition that could not be imposed on a company by law, but there is
no law that says that the FCC must approve every merger, and therefore
it has greater "bargaining strength" during a merger than at any other

Now, let's think about this a moment. Suppose you were the head of
the FCC, and you could impose three conditions on SBC and AT&T prior
to granting your approval of the merger. What might you ask for?

Certainly, some CLEC's might ask that SBC continue to provide UNE-P.
Maybe the courts have said that the FCC doesn't have the authority to
require a phone company to provide UNE-P, but this situation is a
little different, because the FCC can in effect say that unless the
voluntarily agree to continue to offer UNE-P, approval will not be
forthcoming anytime soon. That would certainly be a rational thing to
consider, since many fear that the merger of SBC and AT&T is the start
of putting the bad old Bell System back together again.

On the other hand, if I were with an ISP, I'd be banding together with
other ISP's to ask for non-discriminatory access to SBC customers for
the provision of DSL. No more saying that customers on certain types
of lines can only have DSL if they buy it from SBC, and no more
requirement that a customer have circuit-switched dial tone (from SBC
or anybody else) to get DSL service. If SBC wants to be stingy with
the lines that the captive ratepayers bought and paid for, and
continue to force customers to take dial tone whether they want it or
not in order to get broadband service, then maybe they won't mind if
their application sits on the back burner at the FCC for years.

Then there is the little matter of SBC acquiring AT&T's CallVantage
service as part of the merger. If the FCC doesn't include some sort
of non-discrimination requirement for non-affiliated VoIP providers,
customers of VoicePulse, Vonage, et. al could suddenly find that their
VoIP connections go to Hades in a handbasket when using SBC's DSL
service, while CallVantage magically works much better. So again,
there needs to be some sort of agreement that there will be no playing
around with the packets of other VoIP providers. Of course, another
solution would be to require the new company to divest CallVantage,
but since that was probably one of the things that made the offer
attractive to SBC, I doubt they will want to do that.

The merger of SBC and AT&T will make a communications behemoth even
larger, and ironically, many customers who thought they were all done
with SBC when they went to AT&T (or CallVantage) will now find
themselves back in the SBC fold, which is exactly where some of them
may not wish to be. I don't think it is at all unreasonable for the
FCC to put some conditions on this merger. If you agree, and you are
a CLEC, ISP, or VoIP provider, please feel free to forward this e-mail
to whatever trade organization(s) you might belong to. If no one
makes any requests of the FCC, they may just let this merger slide
through, while missing a golden opportunity to insure that some
semblance of competition remains in the telecommunications industry.

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