^{Democracy & Technology Blog} AT&T/BellSouth merger: No competitive significance

The Antitrust Division, led by Assistant Attorney General Thomas O. Barnett, subjected the AT&T/BellSouth merger to the traditional antitrust analysis and concluded that no it would not harm competition. On the residential side of the market, AT&T is virtually nonexistent, or, as the Antitrust Division put it, of “limited and declining competitive significance.” On the business side, there is some slight competition. Competitive Local Exchange Carriers are arguing this justifies re-regulating “special access” and imposing baseball-type arbitration on access negotiations between AT&T and its smaller rivals. How significant is the competitive overlap betwen AT&T and BellSouth that supposedly justifies new regulation? Although AT&T’s specialty is large business customers, it can provide services over its own facilities to only a small minority of buildings in the BellSouth region. That’s why out of an estimated 219,000 buildings in the region, only 30 in Atlanta and Miami are: (1) served only by BellSouth and AT&T (and thus would go from 2 providers to 1 provider when this merger goes through) and (2) could be considered, under present conditions, uneconomical for competitive carriers to connect to their networks. But even that’s no big deal, because competitors can obtain UNE loops to serve at least two-thirds of these buildings with minimal, if any, additional investment.