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Fri 20 Oct 2006 08:00 PM

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AT&T, BelSouth merger put on hold

FCC requests extra time for approval of US telecom deal

Telecommu- nications service provider AT&T’s acquisition of BellSouth Corp — a move which would create the largest phone company in the US — has been delayed once again by the US Federal Communications Commission (FCC).

The FCC’s vote, which is needed to finalise the merger, has been delayed until November 3, to allow for public comment on conditions for the US$80.8 billion deal.

The vote had already been delayed from 12 October, but was further postponed after two Democrat commissioners requested that the public had time to review and comment on proposed conditions.

AT&T’s proposed conditions include freezing some wholesale prices for access to its networks for 30 months and offering high-speed internet access to all homes in its 22-state home territory by 2008.

The merger has already received the backing of the US Department of Justice as well as from both sets of shareholders.

“We firmly believe, as do three foreign countries, 18 state commissions and the Department of Justice — every regulatory or legal entity that had an obligation to examine the benefits of this merger — that no conditions on this merger are necessary for this combination to be a public benefit,” said Michael Balmoris for AT&T.

After the merger has been completed, AT&T will combine the networks of Cingular Wireless, which is jointly-owned by the companies, with those of BellSouth and AT&T networks to create a single fully-integrated wireless and wireline internet protocol (IP) network.

The merger will result in the largest phone firm in the US uniting 67.2 million telephone lines, 57.3 million Cingular Wireless customers and 11.1 million high-speed internet customers.

“The marketplace is changing and the new competitors look like they will be the local phone company versus the cable television company,” commented Jeff Kagan, telecom industry analyst.

“They will both offer telephone, television, internet and wireless.”

“Both sides are currently putting their big bundle services together.

Customers will choose one and say goodbye to the other.

Both sides will have roughly half the customers they have today, but those customers will spend more because they will use more services,” he stated.

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