WASHINGTON-The FCC’s Wireless Telecommunications Bureau does not see the proposed merger of Cingular Wireless L.L.C. and AT&T Wireless Services Inc. as having the potentially negative impact on local telephone service that some consumer advocates have claimed.
“There are some intermodal issues that have been raised. I am not sure that it has a great deal of impact on this analysis,” said John Muleta, chief of the wireless bureau, in a Tuesday press breakfast.
Muleta danced around how much weight WTB was giving to arguments made late last month by the Consumer Federation of America. At that time, CFA began quietly circulating a white paper arguing against the $41 billion merger of AT&T Wireless and Cingular that said because two Baby Bells own Cingular, it will dilute intermodal competition.
FCC Chairman Michael Powell has long argued that instead of worrying about local landline competition, regulators should be concerned about whether there is adequate intermodal competition.
Muleta disputed the relevance of Cingular’s parents, noting that is not new. “It is not as if this is a new relationship that is being put together,” he said.
Muleta said WTB’s analysis, which he believes will be delivered to the commissioners in the next month or two, will be more broad than the review being done by the Department of Justice.
The Federal Communications Commission’s mandate is to approve mergers that are in the public interest while the Justice Department does its review based on a more narrow established antitrust review, said Muleta. The bureau is looking at the impact on rural consumers, the deployment of enhanced 911 and the roll out of third-generation wireless, he said.
Last week, DoJ, SBC Communications Inc. and BellSouth Corp. agreed to change certain aspects of an antitrust consent decree to allow Cingular to purchase AWS’ licenses for Los Angeles and Indianapolis.
When SBC and BellSouth created Cingular in 2000, they agreed to sell licenses in California, Indiana and Louisiana because each of them owned a license in those markets. Additionally Cingular was prohibited from reacquiring the licenses until the end of 2010. AWS bought the licenses in California and Indiana. Now Cingular has agreed to merge with AWS, but that merger cannot be completed if it is barred from reacquiring the California and Indiana licenses.
A federal court must approve the modified final judgement but only after a 30-day comment period. DoJ placed a notice in a recent issue of the Federal Register. Cingular (SBC/BellSouth) will pay for notices in two consecutive issues of the Los Angeles Times, the Indianapolis Star and RCR Wireless News.
DoJ and the FCC are still reviewing the Cingular/AWS merger. The FCC’s internal merger clock runs out in October. Cingular said it believes the merger will be approved, and the transaction will close by the end of the year.
