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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 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. 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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Cable is the better of both evils.
By aceadoni on 1/2/2007 6:14:53 PM , Rating: 3
I pay out the nose for cable max speed availible in my area plus digital plus dvr plus 4 setops plus voip.

I have not had an outage in almost 3 years from service being down (Note I don't use comcraps DNS) Even so I was excited to see that ATT SBC or whatever name it is this year had FTTH avilible close by. When I looked at the cost I would be getting more or less the same service except higher upstream on ATT for the headache of service outages and crapy support. (Note I support DSL end users so I know that ATT tech support is not that great)

The fact is that the telcos are putting money into getting fiber lit all over the place but what they were and will not be prepared for is that most of the cable companies already picked up transit and fiber capacity from the backwash of the bankrupt telcos and ISP's that existed a few years ago. In most areas comcast already has 10G equipment in place and the fiber in place to take advantage of technology. We heard all this before from SBC... We will do this merger and give customers better service ETC... The fact is from the SBC mergers that took place years ago most of those states in which were absorbed still have far less DSL coverage and sad up/Downstream speeds primarily because the circuits are for the most part saturated.
Of cource the bloated debt load of the telcos is from all the fiber they put in the ground in 90's dollars with intrest. Cable can put fiber into the ground or lease it from L3 or one of the others for far less than the cost the telco's took on to build and operate the networks they "Own". The fact is ATT used whatever it could to get the FCC to buckle after getting the go ahead to offer TV programing. Why wasn't the terms given friday or whenever in the original merger language?
ATT offers DSL for 19.95 sure thing well they will offer you crappy oversold dsl service while they charge a premium for real FTTH broadband. They are taking 3K jobs from overseas. Awsone while they are cutting a total of up to 10K jobs in the states do the math on that one. Net neutrality. There is a clause in the agreement for them to wiggle out of that in 2-3 years time. Btw they have already built out their next gen Optical network or they are in the process of finishing it. So of cource they will support net neutrality now. Once they are done they will be able to charge whatever they can get on the new toll roads they built. Forget net neutrality from the telcos they are the main ones lobbying congress against it.
But hey why am I ranting on there is very little I can do but pay for service that works when I need it to which of cource is not any of the telcos in my area.

Remember that MCI blow up who do you think bailed them out the government. So if ATT goes belly up of cource our tax dollars yet again will be used to pay for it. What will happen if the cable operators go belly up they will restructure without gaurantee and either emerge or be absorbed by another operator. Unlike telco cable operators work smarter not harder. As a result the margins on their service is higher. The quality of service in most areas is higher and they have poached customers from the telcos on an ongoing basis for the last 2-4 years. Since the same management is in place at ATT now (Former SBC management) I don't see how you can trust any guarantee's they have made recently as their track records on every other M&A they have done tells a completeley diffrent story if you compare promise to fact.

RE: Cable is the better of both evils.
By yacoub on 1/3/2007 7:29:13 AM , Rating: 2
I dunno about all that but I know one thing... okay, two things:

Verizon FIOS lost my interest when they reset the pricing to be as high at Comcast's cable broadband. wtf would I go through all the trouble of switching for??

The other thing is that I also have had maybe one one-day outtage in the three years I've been at locations with Comcast cable. FIOS is an unknown there as well and some folks are reporting teething issues.

RE: Cable is the better of both evils.
By AxemanFU on 1/3/2007 10:48:33 AM , Rating: 2
Heh. Comcast's primitive digital over analog system is very technically inferior to the state of the art FIOS system, or similar offerings from AT&T. Comcast can't drive true IPTV over their current network strcture without a complete upgrade of their network structure. IPTV, once the last few bugs are worked out, promises to be vastly more capable. Even the simplest things are better. Virtually nstant channel changes, not the slow scanning changes of digital over analog cable. True real time on demand HD video and multimedia, and a dedicated data network structure with greater dedicated bandwidth per customer throughout the path to the POP.

I dunno, it seems to me cable is falling behind the times if they aren't upgrading to provide the same class of services in the future.

By AxemanFU on 1/3/2007 10:52:03 AM , Rating: 2
OH, and telcos aren't increasing their prices 5-7 percent a year on average. check the numbers. If nothing else, the competition will lower your cable bills.

By yacoub on 1/3/2007 7:49:39 PM , Rating: 2
"Heh. Comcast's primitive digital over analog system is very technically inferior to the state of the art FIOS system, or similar offerings from AT&T. "

See you can say stuff like that all you want but the reality is my cable broadband has been essentially flawless, more than fast enough, and FIOS's pricing rise before release made it equivalently priced for a new system that's going through teething problems and comes with the added inconvenience of having to switch everything over to them.

"And boy have we patented it!" -- Steve Jobs, Macworld 2007

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