AT&T – Bellsouth Merger Approved by DOJ

Matt Stoler has some concerns about yesterday’s announcement that AT&T’s merger with Bellsouth has been approved.

The Justice Department has OK’d, with a simple press release, a massive merger between Bellsouth and AT&T with no conditions and without a consent decree or judicial review, effectively reconstituting much of the old AT&T monopoly. The new AT&T will control nearly half of the landlines in the country, and the CEO of AT&T is already on record essentially saying he’s going to get rid of net neutrality.

Post-Progressive Era antitrust law is not something about which I have any expertise and I have no strong views about this merger or about the process by which it was approved. Stoller’s concerns about the DOJ bypassing the standard process strike me as reasonable enough, although there’s no reason off the top of my head why either Congress or the Judiciary should have any part in approving specific mergers (setting the broad parameters of anti-trust law and ensuring the law is folowed and Constitutional, yes; conducting specific regulatory activities, no).

What’s interesting to me about all this is the idea that this merger somehow “effectively reconstitut[es] much of the old AT&T monopoly.” Those of us old enough to remember the heyday of Ma Bell recall an age where telephone service was a public utility’ cellular phones were either non-existent or such an expensive luxury as to be out of reach for any but most wealthy; AT&T (a/k/a “the telephone company”) owned the telephones in our homes, charging a quarterly rental fee; and there were essentially no other alternatives.

That world is a distant memory. Anyone who has signed up for telephone service in the last fifteen years or so has gone through the gauntlet of questions they are required to ask to ensure customers are aware that they have their choice of local and long distance carriers. There are a variety of VOIP services available that allow consumers to bypass the big telecoms while still using their landline phones or, as people are increasingly realizing, cellular service is now cheap enough to bypass landline phones altogether.

None of that is in any danger of changing. There are simply too many companies out there who have an interest to allow much rollback. Mergers like this one or like the AT&T-Cingular merger on the cellular side are about synergies rather than the ability to dictate price.

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James Joyner
About James Joyner
James Joyner is Professor and Department Head of Security Studies at Marine Corps University's Command and Staff College and a nonresident senior fellow at the Scowcroft Center for Strategy and Security at the Atlantic Council. He's a former Army officer and Desert Storm vet. Views expressed here are his own. Follow James on Twitter @DrJJoyner.

Comments

  1. Ugh says:

    The view of the anti-trust lawyers in my office, and those I know at the DOJ’s anti-trust division, is that the Bush administration has chosen not to enforce the civil anti-trust laws. The only exception to this was their disastrous challenge to the Peoplesoft-Oracle merger.

  2. madmatt says:

    obviously you live in a part of the country where you have options…for many americans there is no competition or what there was is dwindling.