Washington -- Bell Atlantic Corp. president and chief
operating officer Ivan Seidenberg declared last week that the Federal Communications
Commission should stop AT&T Corp. from buying MediaOne Group Inc. to preserve
competition in the Internet market.
Seidenberg said the agency should block the $56.4 billion
merger to prevent AT&T from growing too big and exercising undue influence over
consumers' data choices.
"In this particular case, I think the
MediaOne-AT&T transaction simply went too far in this juncture, and the FCC should
stop this transaction," Seidenberg told reporters after a speech here to the National
Seidenberg said the commission needs time to analyze the
marketplace impact of previous AT&T acquisitions, including those of
Tele-Communications Inc. and Teleport Communications Group.
"I think it's time to sort of let that transaction
settle and let's see what they can do with it -- give them a chance to implement the
things they said they would do," Seidenberg said. "But don't let them gobble up
the next set of companies and create effective control where it will change the
dynamic of the Internet forever."
Bell Atlantic joined SBC Communications Inc. in complaining
about AT&T's attempt to become the biggest player in the cable business and to grab
the largest share of the broadband Internet-access market.
Oddly, Bell Atlantic once had a deal to buy TCI, and SBC
was once rumored to be in merger talks with AT&T.
AT&T spokesman Jim McGann said Seidenberg's comments
were not a surprise.
"Anytime the head of a monopoly Bell company is going
to face further competition, they are going to take aim and try to slow it down or stop
it," McGann said.
Last Monday, a spokeswoman for the United States Telephone
Association said the trade organization for 1,400 local phone companies was not opposed to
the AT&T-MediaOne merger. Instead, the USTA wants regulatory parity with cable
"We would like the same regulatory atmosphere,"
the spokeswoman added.
Bell Atlantic is waiting for the FCC to approve its $53
billion takeover of regional phone carrier GTE Corp. The U.S. Department of Justice
already approved that transaction.
Seidenberg said the Bell Atlantic-GTE deal is immune to the
kind of scrutiny he wants given to AT&T-MediaOne.
"The Bell-GTE transaction is subjected to far more
scrutiny and open architecture than any cable company, so there are many more effective
controls in the marketplace than exist in the cable context," Seidenberg said.
After merging with GTE, Bell Atlantic would control about
60 million phone-access lines, or 36 percent of all U.S. phone lines.
Seidenberg also predicted that AT&T, through full and
partial interests in cable systems, would be found in violation of FCC ownership caps.
"You have one company now that has in effect garnered
somewhere between 60 percent and 70 percent effective control over cable assets. And to
the extent that they do that, they can force people to buy their content, which I think is
something that's both incorrect and improper, and it's probably going to be found to be in
violation of some FCC rule," he said.
The FCC prohibits one cable operator from having an
attributable interest in cable systems that reach 30 percent of homes passed by cable
However, the commission has not been enforcing the rule,
after a court found the underlying statute unconstitutional.