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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 Shining Arcanine on 1/2/2007 6:38:34 PM , Rating: 0
I forgot to mention that the US tax code's complexity is really hurting the ability of businesses to do things. If the US would get rid of corporate taxes like other countries do, we would see much more happening and much lower prices on everything with a stronger economy.


RE: Thank God for this merger
By encryptkeeper on 1/3/2007 9:52:30 AM , Rating: 2
Whoa there pal. Now that prices are where they are, you think lowering or even eliminating taxes on that corporation will bring lower prices? Hell no, a windfall like that would never be seen on the consumer side. Take gasoline for example. 7 years ago gas in my hometown was under a buck a gallon. Now that the oil companies know we will find a way to fork out 3 bucks a gallon, they'll NEVER let prices get close to that again. Besides, the government would levy those taxes on the common people to make up for the loss. The real problem with the government now is a catch 22. There are checks and balances for the checks and balances. Our government design is complex but also one of the best designed systems in history. But right now there is so much spent on making sure so little is spent that the circle will never end. DOn't you see? They CAN'T take away corporate taxes in the US or else big corporations would screw us more than they already are.


RE: Thank God for this merger
By AxemanFU on 1/3/2007 10:28:34 AM , Rating: 2
Our Tax code does suck though. It is FAR FAR FAR too complex, and riddled with loopholes that allow for deductions and breaks that are intended to provide a social influence. The tax system is used for social engineering. Paine and Franklin are correct: the power to tax is the power to control behavior. Then there's the complaince cost, and the grey and black economies encouraged by the tax system, etc. It could be much better, but noone has the guts or humility to revise it.


RE: Thank God for this merger
By Ringold on 1/3/2007 4:25:01 PM , Rating: 2
Two world-class economists (forget the name of the University behind them) recently published their analysis of a consumers propensity to invest, spend and earn additional income under two different tax systems.

Under the FairTax (a flat national sales tax replacing all current federal taxes), it was quite simple. Invest more, and work more.

Under the current tax code, the analysis was nearly impossibly complex. Definitely impossibly complex for a human mind, and extremely difficult without 'heavy iron' running the numbers through complicated custom models. Their conclusion was, if the consumer can even understand his own motivations for doing any of it, the results were "bizarre".


RE: Thank God for this merger
By masher2 (blog) on 1/3/2007 10:31:04 AM , Rating: 1
> "you think lowering or even eliminating taxes on that corporation will bring lower prices? "

Of course, and there are tens of thousands of historical examples to prove it. If a company can afford to lower prices and still make a profit, it will...or its competitors will.

> "Now that the oil companies know we will find a way to fork out 3 bucks a gallon, they'll NEVER let prices get close to that again"

Yeah, thats why gas prices have dropped here over a dollar a gallon from their highest price (dropped by double that if you count the Katrina price spike) :rolleyes:

The problem with gas prices is simple. We've refused to allow a single new refinery to be built in this nation for the past 30 years. We just can't meet demand...and no community is willing to allow a new refinery in their own backyard. Many companies have tried, and spent millions of dollars trying to get the thousands of EPA, state, and local approvals needed. So far only one has succeeded...and then it instantly wound up stuck in the courts, blocked by a suit from an environmental group.


RE: Thank God for this merger
By AxemanFU on 1/3/2007 10:36:21 AM , Rating: 3
Also, corporate taxes are not taxes on the corporations..which are made up entities. They are taxes on the shareholders of the corporation, which ARE individuals invested in the corporations. They are ultimately taxes on people, just like you and me. Your 401K, my IRA, your stock, my bonds. That may be a bit simplistic sounding, but that is what it ultimately boils down to. If you cut corporate taxes to zero, their profits would spike, but then they can afford to pay their employees more (which they will have to do to keep them from going to other companies that can ALSO afford to pay them more), make bigger purchases and do more business that will drive the economy, and they'd also have a LOT more room to drop the prices of their products and services to compete. They would start to undercut eachother in price, and eventually (or quickly) their prices would fall to the point where reasonable profit margins are back, due to price competition. This is basic economics 101. They can't conspire to keep their prices artificially high because that would be price fixing, a HUGE no-no. People go to prison and get huge fines for that.

Ultimately, taxes on corporations are simply hidden taxes on the investors and stockholders in that corporation.. i.e. you and me.


RE: Thank God for this merger
By iNGEN on 1/4/2007 1:12:10 PM , Rating: 2
KUDOS to you!

Wow, that's four people paying attention. In just one thread, if I didn't see it myself I wouldn't believe it!


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











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