Consumer Union hates SBC & AT&T Merger


The deal is barely a day old and Consumer Union has come out with a statement saying this is bad for the consumers. From a consumer perspective, I think this deal is not that much of a problem. AT&T has pulled back from consumer business and is focusing on the enterprise markets. Not sure why CU is out doing what it does best.

“The imminent acquisition of AT&T by SBC is a symbolic reminder that the Telecommunications Act of 1996 has failed to produce the vigorous competition that was promised,” said Gene Kimmelman, Senior Director of Public Policy and Advocacy for Consumers Union.

They are lamenting that the business is basically turning into a duoply.

“Consumers have only two choices – a single cable company that dominates video and high speed Internet or a regional Bell operating company that dominates local, long distance and wireless telecommunications,”said Mark Cooper, Director of Research at the Consumer Federation of America.”Two companies are not enough to provide serious price competition or strong incentives to innovate.”

He does have a point. However, in a larger context, and not in the context of this deal. FCC had been pushing the whole multi-modal competition as an answer to the mess left behind by the 1996 act. Multimodes being Wireless, Wireline and Cable. Well, as we know now the Bells have the first two.

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