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The biggest telecommunications merger in U.S. history just received federal approval

The Federal Communications Commission on Friday approved AT&T Inc.’s $86 billion acquisition of BellSouth Corporation, making it the largest telecoms merger in U.S. history.

The completion of the BellSouth acquisition comes after an extensive review process which included approval by or filings with 36 states, the U.S. Department of Justice and the FCC, as well as with three foreign countries. In order to receive bipartisan FCC approval, AT&T volunteered to make broadband access increasingly affordable and available to consumers and to support public safety.

Through a combination of technologies, AT&T is committed to making broadband services available to 100 percent of residential living units in it's 22-state local-phone-service territory by the end of 2007. Additionally, AT&T will offer a stand-alone broadband service for $19.95 as well as other offers to encourage broadband adoption by those who do not currently subscribe.

The transaction also consolidates ownership and management of Cingular Wireless and Yellowpages.com. AT&T will immediately integrate and converge AT&T, BellSouth and Cingular wireless and wire line Internet Protocol networks, combine product portfolios and integrate customer care capabilities. The new company also plans to expand the reach of broadband access in remote and rural locations in the traditional BellSouth region.

"AT&T, BellSouth and Cingular have led in developing and deploying many of the communications services that customers depend on today, including broadband DSL and wireless technologies," said AT&T Chairman and CEO Edward E. Whitacre Jr. "Moving forward, AT&T will work to integrate these services for customers in the Southeast, across the country and around the world."

AT&T will launch new advertising which will begin the transition of the BellSouth brand name to AT&T in the coming days. AT&T will re-brand Cingular through a co-branded transition which is scheduled to start in 2007. Details regarding the Cingular branding will be announced at a later date. Yellowpages.com will not undergo a name or Web site address change.

AT&T's corporate headquarters will remain in San Antonio. The new AT&T Southeast (formerly BellSouth Corporation) and Cingular will continue to be based in Atlanta.

Stockholders of the former BellSouth received 1.325 shares of AT&T common stock for each common share of BellSouth. Based on AT&T's closing stock price on Thursday, Dec. 28, 2006 this exchange ratio equaled $47.04 per BellSouth common share. Since the merger was announced, the market price of AT&T shares has risen 26.83 percent and BellSouth shares have increased 48.76 percent. BellSouth's common stock and debt securities will be immediately delisted from the New York Stock Exchange in connection with the completion of the acquisition

AT&T plans to repatriate 3,000 jobs currently outsourced by BellSouth outside the United States as well as to make its disaster-recovery capabilities available to facilitate the restoration of services in the former BellSouth region in the event of a hurricane or other natural disaster.

"These commitments reflect our long history of providing consumers and businesses with the most advanced and affordable communications services," said Whitacre. "We can't wait to show people what the new AT&T can do."

The Communications Workers of America believe the merger of AT&T and BellSouth will promote increased investment and build-out of high-speed networks that are critical to the region's economic growth and the nation's position in the global economy. CWA President Larry Cohen said the merger agreement included real commitments by AT&T-BellSouth for an expanded build-out of both higher speed Internet services and DSL, an important step forward in bringing the full promise of the Internet to areas that have been passed by.

"Workers at BellSouth know that the future of communications and their own future is in the build-out of high-speed telecommunications services. This merger will help provide the resources to make this possible, and at the same time, should help create quality jobs," said Noah Savant, CWA's vice president for the Southeast and BellSouth territory. "Of course we remain concerned about the net effect on jobs within the region for frontline employees and the services we provide. We are pleased to see AT&T commitment to bringing thousands of support jobs back to the United States," Savant added.

The U.S. has fallen to 16th in the world in terms of availability and access to high-speed Internet services. The availability and benefits of the Internet should be universal, but residents in rural communities, low-income urban areas and other communities don't have high-speed access and are at a growing disadvantage.

High-tech innovation and job growth, advances in telemedicine, distance learning, improving public safety and e-government all are possible and in fact routine in much of the world. In the United States, however, current speed standards are not sufficient to support these kinds of services, Larry Cohen said. "The build-out of true high-speed networks requires a huge investment of tens of billions of dollars and the AT&T-BellSouth merger will begin to provide the resources to do this," he added. Cohen also stressed that CWA strongly supports an open Internet "where consumers can go where they want, when they want. Nothing should be done to degrade or block access to websites," he said.



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RE: Thank God for this merger
By knipfty on 1/2/2007 12:34:36 PM , Rating: 2
Don't count on it. The cable companies are far ahead of the telcos. They have already run fiber all over there networks. It's just the last 100 feet that still is coax.

Because there are no regulations, I now enjoy 30 mbs service from cablevision that is much cheaper than anything Verizon or any other telco can provide.

I'm all for competition, but so far the cable companies are the inovators here, not the telcos.


RE: Thank God for this merger
By creathir on 1/2/2007 1:08:03 PM , Rating: 1
Hate to break it to ya, but telcos are not that far behind, in fact, I would say they are ahead.
A majority of customers are within 15,000' of a CO/RCO. Cable companies have no incentive to put fiber to the home, as their technology (cable modem) has not maxed its potential. DSL however, is pushing the limits of what it can do. The incintive lies with the telco to lay more fiber, not the cable company.


RE: Thank God for this merger
By AxemanFU on 1/2/2007 2:21:35 PM , Rating: 1
I'd agree. The cable companies are working to upgrade their last mile, but they have massive upgrade issues to confront in converting from analog TV to digital TV, and then to true IPTV. The cable network's current "digital over analog" approach consumes massive amounts of bandwidth, as does their shared bandwidth data network structure. Until they install the equipment infrasctructure to go to an entirely IP based network, they'll have less future proofing than the telco's who have massive fiber networks, but only have to upgrade the "last mile" portion of the network. IP based video saves incredible amounts of bandwidth compared to channelized analog that cable still uses. It's still a big fight to the finish, and the telco's seem more poised for the future of technology.


RE: Thank God for this merger
By Blood1 on 1/2/2007 1:57:40 PM , Rating: 2
What service r u using that is offering 30Mbps? Is it the optimum boost package?
I'm still waiting for Verizon FiOS to hit my area....


RE: Thank God for this merger
By knipfty on 1/3/2007 9:55:30 AM , Rating: 2
Yes Optimum Boost. I'm working on also migrating my domain there as well as part of this service. So for $55 per month, I get 30 mbs service. And from what I am hearing they are testing 100 mbs service. Verizon's FIOS service is much more costly. They are larte to the game and are playing catch up.

By the time fiber makes a difference in the home, I'm sure the cable companies will be there. I just love competition.

And to comment on the other threads about socialism, it simply does not work. The only way a government can provide a cost effiective system (medical, energy, etc) is to allocate resources and thereby increasing wait times or fewer products.

Why would anyone want the goverment to provide health care when they cannot provide simple services (like fewer pot hole and less traffic)


RE: Thank God for this merger
By encryptkeeper on 1/3/2007 10:10:51 AM , Rating: 2
You have to wait long enough for a doctor as it is without the government taking care of it. Looks like this optimum package is pretty sweet, but of course it's not available everywhere, and large cable companies probably can't offer it because their infrastructure wouldn't handle 30mbs to all their customers.


RE: Thank God for this merger
By masher2 (blog) on 1/3/2007 10:32:03 AM , Rating: 2
In any nation with socialized medicine, those who can afford to go elsewhere, do. That says it all right there.


RE: Thank God for this merger
By Christopher1 on 1/3/2007 5:48:14 PM , Rating: 2
I don't think he actually has a service that is 30Mbps. Even in BALTIMORE, the highest speed you can get is 10Mbps, unless you are in a datacenter or 'hosting service'.


RE: Thank God for this merger
By masher2 (blog) on 1/3/2007 6:24:14 PM , Rating: 2
> " don't think he actually has a service that is 30Mbps. Even in BALTIMORE, the highest speed you can get is 10Mbps"

I hate to break it to you, but Baltimore isn't exactly the center of the broadband universe. Several providers are currently trialing ultra-highspeed broadband in limited areas, at speeds up to 30mbps.


RE: Thank God for this merger
By encryptkeeper on 1/3/2007 10:02:13 AM , Rating: 2
30 mbs? Are you sure you don't mean 3mbs? It does go up to 30 but damn, I'd think that would come at a nice price. My 3mbs is 50 bucks a month.


RE: Thank God for this merger
By knipfty on 1/3/2007 12:50:16 PM , Rating: 2
30 Mbps service. Base service is 15 Mbps for $45 per month. Add $10 and get Boost. Here is a snipet from there website:

quote:
Experience the new, even faster Optimum Online® Boost. Downloading music, uploading photos, emailing large attachments and online gaming will be better than ever with speeds up to 30 Mbps downstream and now 5 Mbps upstream. It's the speed you need to share your internet connection across multiple computers.


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