Humpty-Dumpty? Competitive Effects of the AT&T­BellSouth Merger

[SOURCE: Gregory Rosston, Stanford Institute for Economic Policy Research]
AT&T has made an offer to buy BellSouth. This is not the first large telecommunications merger and it is likely not to be the last. Of the proposed telecommunications mergers since the passage of the Telecommunications Act in 1996, only one, the proposed MCI-Sprint merger, was challenged and blocked on antitrust grounds -- all of the other mergers have been approved, some with divestitures to ameliorate competitive concerns. This is also just one in a series of mergers that have partially reconstituted the original AT&T that was broken apart in 1984. There will be a lot of talk in the press about the competitive concerns surrounding the recreation of Ma Bell. This brief will outline some of the competition analysis the Department of Justice, the FCC and state regulatory agencies will undertake in evaluating the proposed merger. In addition to analysis of potential competitive effects resulting from the merger, much of the public debate is likely to focus on competitive issues unrelated to the merger because the review process gives parties a chance to bring their concerns to the forefront of the debate. While those may enter into the debate, they should not be a part of the competitive effects analysis and the DOJ is unlikely to address those concerns. The FCC has a broader mandate and has shown a tendency to address nonmerger issues in the context of mergers, so its reaction may be different.
http://siepr.stanford.edu/papers/briefs/policybrief_mar06.pdf