Wow. This happened late in the day and late in the year. AT&T has provided some concessions which should get them over the hurdle to have the FCC approve their acquisition/merger with BellSouth. Here is a rundown of some of the concessions and why I think they are or aren’t important.
- AT&T/BellSouth will repatriate 3,000 jobs which are outsourced to offshore companies. At least 200 of these jobs will be in the New Orleans MSA. What it means: bringing jobs back to the U.S. always plays well with politicians and providing jobs in the New Orleans area makes everyone feel good. Did I mention that Michael Copps’ wife is from New Orleans. Michael Copps is one of the commissioners who was holding out on this deal. I’m sure those things aren’t related.
- AT&T/BS will commit to providing at least 200 kbps (in at least one direction) Internet access to 100% of the residential units in their territory. At least 85% of which will be via wireline access (the rest being satellite or WiMax). For at least 30 months, customers who aren’t current high-speed customers will be able to get 768 kbps rate service for $10/month. What it means: a potentially huge buildout and greater access to Internet service. That can’t be bad. Having a cheap bump to slower broadband service should drive adoption. Probably something they planned on doing anyways but having it in writing is nice.
- AT&T will take steps for disaster recovery and will donate $1 million to foundations and public entities for promoting public safety. What it means: they probably would have done the work to be prepared for disasters since any major interruption would have led to FCC scrutiny (and loss of revenue) anyways. The $1 million donation is nice but still seems like a low amount given the market cap of AT&T and BellSouth ($136 billion and $85 billion respectively).
- AT&T will provide a report describing their efforts to provide high quality service to customers with disabilities. What it means: Not much. I have no idea what the report could say and if there could be any consequences from it.
- AT&T will continue to offer UNE access and won’t seek to increase fees. What it means: competitors will be able to use the combines AT&T/BS network to provide high speed Internet service.
- AT&T/BS will not increase rates on DS1 and DS3 private line services for 48 months. What it means: good for businesses which run large internal telecommunications networks (think multi-national firms and financial institutions).
- AT&T will offer in the BellSouth territory, within twelve months of the merger closing date, ADSL service without requiring circuit switched voice telephone service. What it means: this means consumers will finally be able to buy “naked” DSL. I’ve heard BellSouth has had the ability to do this for quite some time but has held off due to the revenue implications – i.e., typical monopoly stuff. Allowing consumers to buy naked DSL lines might finally give VoIP companies (like Vonage) a much needed boost in their subscriber counts.
- AT&T will offer stand alone 768 kbps ADSL service for no more than $19.95/month. What it means: so given that a circuit switched voice call is 64 kbps, I think this is more than enough bandwidth for VoIP. So given that something like Vonage costs $25/month for unlimited local and long distance, this means you could get a medium speed Internet connection and free local and long distance for about $45/month. Not bad compared to what people are currently paying.
- AT&T/BS commits that it will maintain a neutral network and neutral routing in its wireline broadband Internet service. AT&T commits to maintain this stance for two years or whenever Congress enacts legislation addressing this issue. What it means: should be a good thing for all consumers. Having a major player commit to network neutrality (i.e., content providers can’t pay more for their content to be delivered more efficiently/effectively) should induce other players to play by the same rules. Interesting is that in this commitment, AT&T defines wireline as wireline broadband service and WiMax fixed wireless service but not broadband satellite service.
- AT&T will assign or transfer all of the 2.5 GHz spectrum currently licensed or leased to BellSouth within one year. What it means: no idea and I’m too lazy at this time of night to figure out what services are offered in this spectrum. If you know, post it in the comments.
All in all, this should be a good thing for consumers as well as for some companies (large multi-nationals and VoIP companies). It should also be good for ISPs who need access to unbundled broadband lines to sell to customers.
(via the Wall Street Journal [subscription required])
UPDATE: Techdirt’s take on the deal here.
UPDATE 2: Bloomberg story on the deal here.