What the AT&T Deal Means for Consumers

[SOURCE: Wall Street Journal, AUTHOR: ]
The $67 billion merger that will make BellSouth Corp. part of AT&T Inc. is expected to accelerate the battle of the bundles. The cable industry and the phone companies are aggressively competing to attract new customers by offering attractively priced packages of home phone, Internet, cable and cellphone services. AT&T Chairman and Chief Executive Edward Whitacre has long identified $100 as a potential target price for a package of those four services. While that price hasn't been offered yet, the merger increases the pressure on the phone and cable rivals to deliver more competitive packages as a way to keep competing services from poaching customers. Packages are convenient and can be good deals for consumers who already spend a lot on communications and entertainment. Bundles that now mostly appeal to consumers on the basis of price and convenience could develop into truly integrated services with features like cellphones that automatically become home-phone extensions when plugged into a base station at home, caller ID that is displayed on the TV screen, or video recorders that can be programmed with a cellphone. Not all consumers stand to benefit from service packages, however, and many consumer advocates fear that the phone and cable companies will eventually become so large that they essentially can dictate prices. Bill Hardekopf, chief executive of SaveOnPhone.com, a consumer Web site, believes that consumers who spend little on long distance or wireless won't benefit from packages. One of the only alternatives will be through Internet-based phone services. Vonage Holdings Corp. and the Skype Technologies unit of eBay Inc. offer cheaper prices for Internet-based home phone service than most phone or cable companies. Vonage offers unlimited local and long-distance service in the U.S. and Canada for $24.99 a month with minimal taxes and fees. Internet-based services often can't offer full-service 911 and won't work if the power or Internet connection fails. Customers must already have high-speed Internet service.
http://online.wsj.com/article/SB114169832980391055.html?mod=todays_us_pe...
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There May Be Choices, but They Aren't Always Easy
[SOURCE: New York Times, AUTHOR: Matt Richtel]
Consumer groups argue that, by and large, industry consolidation has reduced choice for most consumers who are not ready yet to abandon their traditional phone lines. As upstart local telephone companies and long-distance competitors have dried up or been acquired, the Bell and cable companies have become ever more powerful. "There are large competitors that are lightly regulated," Michael Shames, executive director of the San Diego-based Utility Consumers' Action Network, said. "They don't have serious fears of competitors taking market share." Internet phone service "does offer a potential alternative," he said. But "consolidation of the telecom market could help large companies suffocate or control" competition from Internet phone providers. For consumers, getting a choice requires shopping around and being comfortable with new technology.
http://www.nytimes.com/2006/03/07/business/07consumer.html?_r=1&oref=slogin
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