FCC approves AT&T/BellSouth deal

The FCC has approved AT&T's acquisition of BellSouth following a series of concessions AT&T filed with the agency late Thursday. AT&T had been bending a bit in its attempt to get its acquisition of BellSouth approved by the FCC. In a letter filed with the FCC yesterday, the carrier giant pledged to adopt Net neutrality principles, divest a large number of broadband wireless license owned by BellSouth and would put off any increases in special access line pricing, among other commitments.

AT&T officials said in the letter that the new commitments go well beyond the promises of its previous merger filings. The latest filing stated that AT&T would offer “a neutral network and neutral routing” of Internet traffic, while conforming with the FCC’s August 2005 Net neutrality policy statement for a period of at least 30 months. Meanwhile, another concession pledged that AT&T would “assign and/or transfer top an unaffiliated third party all of the 2.5 GHz spectrum” that the combined company would otherwise own, a move that could affect the fortunes of potential competitors in the budding WiMAX market.

In a related commitment, AT&T said it would continue to build out broadband coverage for its 2.3 GHz wireless licenses currently owned by BellSouth, with the goal of having coverage of 25% of the population in its service areas by July 2010. The WiMAX Forum expects to soon certify equipment interoperate in both the 2.5 and 2.3 GHz frequencies, with 2.3 GHz coming first.

Among other concessions, the carrier said it would not raise prices for its special access lines for at least the next four years. Also, it would sell DSL as a stand-alone service, dropping the requirement for customers to buy wireline telephone services along with it.

Additionally, AT&T said it would add about 200 jobs to a rebuilding New Orleans community, while bringing about 3000 more jobs that had been off-shored back to the U.S.

The concessions were a victory for the two FCC Commissioners—Democrats Michael Copps and Jonathan Adelstein—who were set to vote against the merger. The five-member FCC had been mired in a stalemate over the deal because former Comptel employee and current commissioner Robert McDowell, a Republican, chose to abstain from voting on the merger.