Only the cable industry stands between competition and the reconstruction of the AT&T Inc. phone monopoly, National Cable & Telecommunications Association president Kyle McSlarrow said in a letter to congressional communications-policy leaders Monday, one day after AT&T said it would purchase BellSouth Corp. in a massive transaction expected to clear regulatory hurdles largely unscathed.
Although the context of the letter was AT&T’s and Verizon Communications Inc.’s campaign to eliminate local video franchising, McSlarrow used the $67 billion merger announcement to warn Sens. Ted Stevens (R-Alaska) and Daniel Inouye (D-Hawaii) and Reps. Joe Barton (R-Mich.) and John Dingell (D-Mich.) that AT&T is “on the verge of re-creating Ma Bell,” having “wiped out their telephone competition” and “swallowed their long-distance competition.”
“And,” McSlarrow added, “only one competitor really stands in their way: the cable industry.”
Federal Communications Commission chairman Kevin Martin -- who promised to review the deal "expeditiously" -- did not raise any AT&T-BellSouth objections in a statement. Inouye, the most senior Democrat on the Senate Commerce Committee, said the “merger will require an exacting review by federal regulators and the Congress to protect the public interest and to preserve benefits of competition and innovation for all Americans.”
In his letter, McSlarrow said AT&T alone had a market capitalization greater than that of “the entire cable industry.” At Monday’s market close, AT&T’s market cap stood at $105 billion, while the combined market cap of just Comcast Corp. and Time Warner was $136 billion.
An NCTA spokesman said the letter should have referred to AT&T’s valuation after the BellSouth deal closed and referred to cable operators instead of the entire cable industry.