AT&T deal puts focus on Net fees

[SOURCE: USAToday, AUTHOR: Paul Davidson]
AT&T's proposed purchase of BellSouth gave fresh ammunition Monday to critics of a push by the big local phone companies to charge websites fees to ensure fast delivery of their content. Even before the deal, AT&T and BellSouth discussed plans to charge Internet-based phone company Vonage, Google and other Web providers new fees to ensure speedy delivery of their phone calls, video or other content. Though proposals in Congress would bar phone companies from blocking access to rival websites, none would prohibit their offering enhanced services. The question of whether an even bigger AT&T should have to comply with Internet non-discrimination principles is expected to take center stage as consumer advocates urge regulators to reject the deal. Some rivals say arguments for such restraints are bolstered by the clout a bigger AT&T customer base would have. “Arguably, there's less competition as a result of these mergers,” says Paul Meisner of Amazon. Consumer groups also fear the $67 billion deal will hamper competition for wireless and large business customers, driving up prices. The merger creates a behemoth with 70 million wire-line customers and 54 million wireless subscribers. Local phone companies such as AT&T now face their biggest competitive threats in residential service from wireless companies, cable companies and Internet-based phone companies. Gene Kimmelman of Consumers Union says the deal gives Cingular Wireless, jointly owned by AT&T and BellSouth, even less reason to offer its wireless service as a replacement for home phone service. The new company should have to divest Cingular, he says.
http://www.usatoday.com/printedition/money/20060307/1b_mergerhurdles07.a...