Cablers Seek AT&T-BellSouth Conditions

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Washington— Five major cable companies last week asked for conditions on AT&T Corp.’s merger with BellSouth Corp. to ensure that the combined phone giants cannot discriminate against cable’s competing digital phone service.

Those seeking conditions were Advance/Newhouse Communications, Charter Communications Inc., Cablevision Systems Corp., Cox Communications Inc. and Insight Communications Co. Each has introduced voice-over-Internet protocol (VoIP) telephone service to cable subscribers.

In a letter to the Federal Communications Commission, the cable operators said some of the conditions they want should apply to all cable VoIP providers, meaning cable’s biggest players — Comcast Corp. and Time Warner Cable — would benefit without actually having to take a public position at the FCC.

AT&T’s takeover of BellSouth would make it by far the dominant local phone company in the U.S. with 70 million access lines, prompting the cable companies to call for conditions that would protect new voice entrants’ ability to compete.

“AT&T has the incentive and ability today to discriminate against cable’s voice service to retain its own voice customers,” the cable operators said.

AT&T spokesman Michael Balmoris noted that cable’s introduction of VoIP has been an unqualified success.

“Given the steady rise in subscribership for cable voice services, the clear evidence is that the cable companies are competing against wireline providers quite effectively, and their allegations to the contrary are unfounded,” Balmoris said.

In a Sept. 27 letter, the cable operators dwelled on VoIP interconnection issues. Because VoIP has not been legally classified a telecommunications service, it has no interconnection rights, forcing cable companies to work through third parties to exchange traffic with AT&T.

“Requiring AT&T to offer fair and efficient interconnection to its cable competitors can mitigate likely harms resulting from the merger,” the multiple-system operators said.

The cable companies explained that their VoIP service had to be robust because discriminatory treatment by AT&T would undermine the bundle of voice, video and data services that cable wants to market.

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