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FCC Approval of Telecom Mergers Mixed Bag

Oct. 31, 2005
Susan Herold, CU, 202-462-6262
Mark Cooper, CFA, 301-384-2204

Limited conditions a good step, but Congress must ensure broadband competition

(Washington, DC) – Today, Gene Kimmelman, Consumers Union Senior Director of Public Policy and Mark Cooper, Consumer Federation of America Research Director issued the following statement on the Federal Communications Commission approval of the SBC-AT&T and Verizon-MCI merger applications:
“Given the failure of the Department of Justice to impose any meaningful conditions on the SBC-AT&T and Verizon-MCI mergers last week, and the desire of Federal Communications Commission (FCC) Chairman Kevin J. Martin to impose no conditions whatsoever, Commissioners Copps and Adelstein have been forced to carry a heavy burden to protect consumers and preserve the openness of the Internet,” said Mark Cooper, Director of Research at the Consumer Federation of America (CFA).
“Approval of these mergers undermines more than 20 years of efforts to introduce competition into the residential local and long distance telecommunications market,” said Gene Kimmelman, senior director of public policy for Consumers Union.”
“The FCC promises cross-technology competition with Internet phone service on cable and telephone systems, but the Commission has failed to ensure that consumers will receive meaningful choices at fair prices,” Kimmelman added.
“Chairman Martin’s failure to agree to meaningful protections against pricing abuse means competitors can be squeezed out of the market and consumers face price increases.” Cooper added. “The short term enforcement of network neutrality, and the absence of similar enforcement mechanisms for other telephone and cable companies, means that Internet service providers and applications developers can be undermined by anticompetitive practices of network owners.”
“These conditions are not nearly enough. Even if the Commission were to follow-up vigorously – which is unlikely given the Chairman’s opposition to even these minimal conditions – Congress will have to step in to restore an open communications network that supports competition, promotes innovation and protects consumers,” Cooper said.
“Above all, today’s action underscores how critical it is for Congress to jump in and prohibit any form of discrimination that prevents all consumers from receiving affordable, high-speed Internet from diverse commercial vendors,” Kimmelman said.