Last updated: February 21, 2008 - 1:04am
[SOURCE: C-Net|News.com, AUTHOR: Marguerite Reardon]
Only three months after it closed the merger of AT&T and SBC Communications, the new AT&T is opening its checkbook again to buy BellSouth for a whopping $67 billion. So what's this megamerger mean for consumers? Initially, consumers are not likely to even notice the merger, which is expected to close within the next year. For one, AT&T, which is still busy integrating business units and networks from its last merger, will also take time to make all the logistical changes associated with a merger of this size. Another reason consumers likely won't feel the impact right away is that the two companies don't directly compete with each other, except in some business accounts. But taking a longer-term view, consumers could see several changes. While the companies believe the merger will allow AT&T to roll out new services more quickly, consumer groups worry that a bigger AT&T will hurt competition by putting an even tighter squeeze on companies such as Vonage, which uses broadband networks to provide services like IP telephony to consumers. A merged AT&T/BellSouth may also stifle competition and actually slow down innovation, according to consumer groups such as the Consumers Union and Consumer Federation of America. These groups said they would ask the Justice Department's antitrust division to reject the merger. Critics of the merger fear that a bigger and stronger AT&T would have too much influence in the overall market.
* Groups ask Justice Department to reject AT&T, BellSouth merger
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