AT&T merger poses Web threat

[SOURCE: San Jose Mercury News, AUTHOR: Mercury News Editorial]
[Commentary] As AT&T continues to reassemble the scattered pieces of the empire dismantled in the 1984 breakup of Ma Bell, the notion that government regulators would set up road blocks, or even speed bumps, on the path to its $67 billion takeover of BellSouth seems almost quaint. For one, the Bush administration has been reluctant to interfere with its friends in the business world. More important, unlike the old AT&T, the new one doesn't operate in a world in which it is the only viable telecommunications choice. Today, cable and phone firms are competing in everything from voice to video and Internet access. And Internet companies are offering customers new, inexpensive ways to make phone calls and receive TV programs. That's not to say regulators and lawmakers should ignore the potential pitfalls of consolidation in the telecommunications industry. That's particularly true in regard to an issue of special interest to Silicon Valley: the desire of telephone companies, and to a lesser extent their cable rivals, to create a two-tiered Internet. Absent this principle, the telephone and cable companies, which largely control Internet access in America, could pull the plug on the entire Internet telephone industry in order to thwart competition. All they would have to do is demand that Internet calling firms cough up prohibitive fees for reaching customers.
http://www.mercurynews.com/mld/mercurynews/news/opinion/14037111.htm