FCC Changes Conditions of AT&T-BellSouth Merger, Issues Order

The FCC has revised the special access conditions it imposed on its approval of the AT&T Inc.-BellSouth Corp. merger last year.

On Monday, the agency released the order finalizing the $84 billion deal. Commissioners had voted for the AT&T-BellSouth combination on Dec. 29 after much back and forth over competition protections.

The order included a change to original conditions regarding special access. The FCC initially told AT&T it had to reduce its special access rates to CLECs. At the same time, the agency said Verizon Communications Inc. and Qwest Communications International Inc. also had to cut their special access rates to get corresponding lower prices from AT&T. Verizon and Qwest protested the condition, since it was not their merger.

The FCC removed that clause on Monday in a move that benefits Verizon and Qwest. It also shortened the amount of time, by nine months, that AT&T will have to offer lower special access rates. That means CLECs, wireless carriers and other special access customers wont save quite as much money as they had expected, said analysts for investment bank Stifel Nicolaus.

AT&T and BellSouth further agreed to honor the FCCs nondiscrimination principles in a nod to the ongoing net neutrality debate. That condition lasts for 30 months.

AT&T Inc. www.att.com  

BellSouth Corp. www.att.com  

FCC www.fcc.gov