CLECs Say Cingular-AT&T Wireless Merger Will Kill Competition
A new economic analysis of the Cingular-AT&T Wireless merger found that consumers will see wireless and wireline phone service costs increase $3 billion annually, CompTel/ASCENT said in a report released Fri. The analysis comes on the eve of a debate among commissioners’ offices on the merger, which is expected to be before them in the next few days. The filing is significant in that wireline-wireless issues are expected to get considerable attention as the FCC takes up the merger.
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“To date, the only formal quantitative analyses of the merger, including this one, predict rather large price increases even accounting for expected efficiencies,” concluded the study, conducted for CompTel by economists at Auburn U. and Microeconomic Consulting & Research Assoc. The analysis said wireless bills will likely rise $2.7 billion and wireline $300 million.
“The anticompetitive effects of this merger are exacerbated by the fact that both wireless and wireline competitors are dependent on access to the Bell companies’ transport networks,” CompTel said. “The terms and conditions for this critical input are inflated by the Bells anticompetitive practices of ‘locking up’ transport demand into long-term contracts with significant penalties on wireless and wireline competitors that attempt to use non-Bell transport services.”
CompTel highlighted one likely concern of commissioners as they evaluate the merger order: The dominance of Bell-affiliated wireless carriers. “Importantly post-merger, the Cingular/AWS merger will place an astounding 70% of all wireless subscribers in the hands of monopoly landline carriers” Verizon, BellSouth and SBC, CompTel said.
Jonathan Lee, CompTel senior vp-regulatory affairs, told us the group was seeking meetings at the FCC to discuss the findings. “Our whole focus is to try to get the FCC to eliminate barriers to wholesale competition and we believe from that retail competition will spring,” Lee said. “The chairman has always said he is very concerned about competition, especially intermodal competition. Without a competitive, effective wholesale market for key inputs, it’s like the competition of Ford versus Mercury versus Lincoln. It’s all managed by the same firm, just different brands.”