WASHINGTON—AT&T Inc. Chairman Edward Whitacre told the Senate Judiciary antitrust subcommittee he would not oppose conditions on special-access lines as part of any regulatory approval of AT&T’s proposed $67 billion purchase of BellSouth Corp., a merger expected to be eventually approved by the Justice Department and Federal Communications Commission despite criticism by national wireless carriers, consumers and lawmakers.
Whitacre told the Senate panel he would agree to restrictions on special access lines—dedicated lines used by wireless carriers to transmit calls from base stations to mobile switching centers—after initially remarking that robust competition negates the need for any merger conditions.
Sprint Nextel Corp. recently flagged the potential anticompetitive impact on special access from an AT&T-BellSouth combo.
Subcommittee Chairman Mike DeWine (R-Ohio) suggested an AT&T-BellSouth merger could chill the creation of a third broadband pipe in the United States.
“The development of the so-called WiMAX service means cellular companies will be able to provide an alternative to the traditional phone and cable companies for video and Internet offerings. However, there is some concern that this merger will consolidate so much wireless spectrum in the hands of AT&T that it may hinder the development of WiMAX and diminish its potential as a competitive alternative,” DeWine said.
“We don’t have all that much spectrum” for WiMAX, said Whitacre. He described AT&T—60 percent owner of Cingular Wireless L.L.C.—as having a “de minimus,” or minor, amount of spectrum. BellSouth holds a 40 percent stake in Cingular. AT&T and BellSouth hold a healthy amount of 2.3 GHz and 2.5 GHz broadband wireless licenses and leases, but not as much as Sprint Nextel.
“We use that spectrum. We don’t warehouse it,” said Whitacre.
The hearing on the AT&T-BellSouth merger was largely overshadowed by testy exchanges between Senate Judiciary Chairman Arlen Specter (R-Pa.) and Whitacre over the telecom executive’s refusal to answer questions about whether AT&T was sharing customer data with the National Security Agency as part of the NSA’s anti-terrorist surveillance program.
“Senator, we follow the law,” Whitacre repeated when pressed again and again by Specter.
Specter said Whitacre’s responses were “contemptuous of this committee.”
Whitacre rejected press reports that AT&T revised its privacy policy to state that the company owned personal customer information, saying the new privacy language is meant to reflect the pending merger with BellSouth and to make the policy easier for consumers to read.
