WebRTC Solutions Industry News

[June 06, 2006]

Leading Competitive Telecom Companies Ask FCC to Deny AT&T-BellSouth Merger

WASHINGTON, June 6 /PRNewswire/ -- A group of the nation's leading competitive telecommunications companies have filed comments urging the Federal Communications Commission to deny the merger of AT&T and BellSouth, citing the irreparable harms to competition and the public interest that would result from the largest RBOC to RBOC merger in history of the telecommunications industry. The companies that filed the comments are Cbeyond Communications, Grande Communications, NuVox Communications, Supra Telecom, Talk America, XO Communications and Xspedius Communications.
According to the group, the AT&T and BellSouth merger only serves to create a larger monopoly that will have an even greater ability to thwart competition through its increased control of local networks and dominance over intra-modal services. Through its acquisition of BellSouth, AT&T -- which is already the nation's largest provider of local voice, long distance, and broadband DSL services -- will increase its dominance of these wireline-based services, extend its monopoly to 22 states and become the nation's largest wireless provider, creating the nation's largest intra-modal services RBOC.
The group outlined three overall areas that the combination of AT&T and BellSouth will bring significant harms to consumers and businesses. They include:
* Eliminating Existing and Future Competition between RBOCs. As adjacent
RBOCs, AT&T and BellSouth are the most significant current and
potential competitors to one another in the consumer and business
telecom services markets. Both companies have significant network
assets in each other's regions.

* Undermining the Implementation of the Telecommunications Act of 1996.
The AT&T and BellSouth merger will undermine the ability of regulators
and competitors to implement the pro-competitive, deregulatory
framework for local telecommunications that was adopted by Congress in
the Telecommunications Act of 1996.

* Increased Incentive to Discriminate Against Competitive Providers. By
extending its monopoly control over local network facilities in
BellSouth's territory, AT&T will have an increased incentive and
ability to discriminate against competing service providers in retail
markets that depend on access to AT&T's local network facilities in
order to provide service.

Speaking on behalf of the group, Heather Gold, senior vice president of government relations at XO Communications, said, "The time has now come when the FCC must ask itself, 'Are we going too far this time?' This merger will do nothing to bring more competition and choices for consumers and businesses. It will concentrate even more market power in the new AT&T, which is quickly reassembling the old Bell System. The FCC needs to say that enough is enough, and stop the incessant effort of AT&T to reestablish its nationwide wireline monopoly by using monopoly profits to gobble-up its competitors, rather than by competing for customer loyalty through innovation and service."
If the merger is not denied, the group asked the FCC to impose stringent and enforceable conditions to offset the enormous anti-competitive effects of the proposed merger. The group noted in its comments, that the FCC imposed merger conditions on previous RBOC to RBOC mergers that the merging companies simply ignored or which were not enforced.
"We have been down this road before of failed promises following previous Bell to Bell mergers, like those of SBC and Ameritech," said Gold. "The conditions on this merger must have strong enforcement mechanisms with severe penalties if they are not followed. The function of regulatory agencies is to enforce its policies, not to rubber stamp industry actions which thwart those policies."
The group's comments discussed more than twenty specific conditions involving access to AT&T and BellSouth network facilities and services and divestitures of overlapping network assets that the FCC should impose on AT&T and BellSouth if the proposed merger is approved, including:
* Ensure continued access to existing AT&T/BellSouth "section 251"
unbundled network elements at rates capped at current levels;

* Require AT&T/BellSouth to file with states just and reasonable rates
for "section 271" network elements;

* Ensure continued access to AT&T/BellSouth special access services at
rates capped at current levels and on a non-discriminatory basis and
with a "fresh look" period to permit customers to change providers
without incurring penalties;

* Continue to offer AT&T's wholesale private line services at current
rates in BellSouth territory;

* Provide access to copper loops decommissioned by AT&T/BellSouth;

* Eliminate eligibility criteria on EEL UNEs; and

* Divestiture of AT&T's metropolitan network assets in BellSouth
territory and BellSouth's wireless assets, including licenses in the
2.5 GHz range.

About Cbeyond

Cbeyond is an Atlanta-based managed services provider that delivers integrated packages of voice, mobile and broadband services to small businesses in Atlanta, Dallas, Denver, Houston, Chicago and Los Angeles. Cbeyond offers core communications services like local and long-distance voice and broadband Internet access along with enhanced applications, including voicemail, email, Web hosting, fax-to-email, data backup, file-sharing, VPN and more. Cbeyond manages these services over a private, 100-percent Voice over Internet Protocol (VoIP) facilities-based network. For more information on Cbeyond, visit http://www.cbeyond.net/.
About Grande Communications
Headquartered in San Marcos, Grande Communications is building a deep- fiber broadband network to homes and businesses from the ground up. Grande delivers high-speed Internet, local and long-distance telephone, digital cable and wireless home security services over its own advanced network to communities in Texas. Grande's bundled service area includes portions of Austin, Corpus Christi, suburban northwest Dallas, Midland, Odessa, San Antonio, San Marcos and Waco. Grande also leverages its telephony and data infrastructure by serving enterprises and communications carriers nationwide with broadband transport services and network services. Grande's voice network terminates traffic worldwide, offering both traditional and IP-based services; its managed modem network provides coverage nationwide; and its private line and metropolitan networks provide optical services in Texas and surrounding states. Grande's 3,100-fiber-mile network incorporates SONET-based technology for protection, diversity and optimal performance. For more information on Grande Communications, visit http://www.grandecom.com/.
About NuVox Communications:
NuVox Communications provides a complete suite of communications services to business customers in Alabama, Arkansas, Florida, Georgia, Illinois, Indiana, Kansas, Kentucky, Louisiana, Mississippi, Missouri, North Carolina, Ohio, Oklahoma, South Carolina, and Tennessee. These services are provided through advanced Lucent, Nortel, Sonus, and Cisco technology. NuVox's voice over Internet protocol (VoIP) services are delivered via technology from Cisco, Sonus, Sylantro, IP Unity, and Acme Packet. For more information, visit http://www.nuvox.com/.
About Supra Telecom
Supra Telecom, a privately held company established in 1996 and based in Orlando, FL, provides nearly half of all competitive residential access lines in the state of Florida and is one of the largest residential competitors to BellSouth, Sprint and Verizon. Supra provides local, domestic and international long distance, voicemail, and Internet service to its business and residential customers. Today, Supra Telecom(R) serves the states of Florida and New York. For more information about Supra Telecom, visit http://www.supratelecom.com/.
About Talk America
Talk America is a leading competitive, integrated communications provider that offers phone services and high speed Internet access to both business and residential customers. Services include local and long distance phone service, and data services such as high-speed connectivity, security, web hosting, and network services. Talk America delivers value in the form of savings, simplicity and quality service to its customers through its leading edge network and award-winning back office.
About XO Communications
XO Communications, a subsidiary of XO Holdings, Inc. (BULLETIN BOARD: XOHO.OB) , is a leading provider of national and local telecommunications services to businesses, large enterprises and telecommunications companies. XO offers a complete portfolio of services, including local and long distance voice, dedicated Internet access, private networking, data transport, and Web hosting services as well as bundled voice and Internet solutions. XO provides these services over an advanced, national facilities-based IP network and serves more than 70 metropolitan markets across the United States. For more information, visit http://www.xo.com/.
About Xspedius Communications
Xspedius Communications, LLC, is a leading facilities-based provider of integrated communications services to small and medium sized businesses in the southern United States. The company, based in O'Fallon, MO, uses a unique blend of innovation and efficiency to deliver a comprehensive suite of high quality services, including local and long distance voice, data and dedicated Internet access services, in 46 facilities-based markets located in 20 states and the District of Columbia. For more information, visit http://www.xspedius.com/.
XO Communications

CONTACT: Chad Couser of XO Communications, +1-703-547-2746,chad.couser@xo.com; or Susanne Hite of NuVox Communications, +1-864-672-5097,hite@nuvox.com

Web site: http://www.xo.com/http://www.cbeyond.net/http://www.grandecom.com/http://www.nuv

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