Consumers May Miss AT&T

[jeffrey]

Although never the price leader when it came to discount telephone rates, consumers may feel it in their pocket books when AT&T is merged with SBC Communications. Whether you liked AT&T or not, they fought bitter battles with local phone market carriers in court claiming the local markets controlled by the baby Bells were monopolies that hurt consumers.

During these battles, AT&T notched a number of victories that opened up once closed local markets to new competition. When AT&T opened up these markets, they were followed in by a number of smaller carriers that would have never had the resources to open up the markets themselves. The result was that consumers gained a choice in their local phone carrier with some seeing decreases in their local phone bills.




The problem with the AT&T - SBC Global alliance is that AT&T becomes, in essence, one of the baby Bells and no longer will have an anti baby Bell position. Some consumer advocates worry that the loss of a powerful force to oppose the Bells will put them in a position where they no longer have to worry about competition. They also worry that the smaller carriers will be ignored when new telecommunication rules and regulations are drafted without a powerful force as AT&T on their side.

To compound the effect, MCI also recently announced a merger with Verizon. MCI was another proponent of competition that will be lost in the battle with this move.

What this all means is that with Congress getting ready to re-draft parts of the 1996 Telecommunications Act, the voice of competition that AT&T and MCI shouted to the benefit of the small carriers and new entrants will be lost. Since the re-drafting will effect the rules of competition for the cable-TV and phone industries, this could have a negative effect for consumers in the long run.