The devil is in the details

While the Federal Communications Commission is hearing comments on the conditions it has proposed for an SBC Communications/Ameritech merger, the deal's primary opponents gave them one - if a loud "no" can be considered a comment.

In a letter to regulators, AT&T, MCI WorldCom, Sprint, the Tele-communications Resellers Association and the Competitive Tele-communications Association called the conditions "weak" and the deal harmful to the telephone local market.

"We urge the commission to reject this merger, or attempt to fashion conditions that compensate for the anti-competitive effects of the merger," the group wrote.

Lawyers for the letter's signers said the restraints on a combined SBC/Ameritech would be ineffective. "We've always said the devil is in the details," said Richard Devlin, general counsel for Sprint. "Well, now we've found the devil."

Breaking the merged carrier's data functions into separate entities will not level the field for competitive service providers because those affiliates still will share knowledge about SBC's loops and will be free from the "exorbitant" line conditioning charges that competitors pay for digital subscriber line (DSL) service, he said. In the Kansas City market, Devlin claimed, SBC now charges its retail DSL customers half of what it charges Sprint for local lines.

James Cicconi, general counsel for AT&T, objected to caps on the number of local loops the merged SBC/Ameritech would sell at a promotional discount in each of its 13 state markets. Those numbers will amount to less that 8% of the total lines available, said Cicconi. "These conditions ration competition," he said. "They guarantee their market share won't fall below 90 to 92%. Our fear is that this will lower the bar for [regional Bell operating companies] across the nation."

The Association for Local Telecommunications Services later chimed in with its own criticisms, citing the conditions' weak and lax performance standards, a "sunset" limit that removes most requirements too soon and financial penalties against complainants who pay half of the arbitration costs.