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AT&T offers new merger concessions

December 29, 2006|From Bloomberg News

AT&T Inc., the largest U.S. phone company, agreed to new concessions late Thursday in an attempt to win regulatory approval for its $86-billion purchase of BellSouth Corp.

AT&T made the offer in a letter filed with the Federal Communications Commission, hoping to have the deal approved before year-end and end a three-month stalemate between FCC Chairman Kevin J. Martin, fellow Republican Deborah Taylor Tate and the panel's two Democrats, who have sought price controls and other concessions.

Buying BellSouth would give San Antonio-based AT&T a third of the nation's land lines and allow it to dominate local service in California and 21 other states. It would also gain full control of Cingular Wireless.

Among the concessions, AT&T has promised to offer affordable stand-alone digital subscriber line Internet service and sell some of its wireless spectrum. AT&T also has promised to observe "network neutrality" principles that prevent phone and cable companies from charging extra to send some high-bandwidth data services through their wires faster than others.

Neutrality supporters have urged Congress not to let phone companies impose higher fees for faster service, which they liken to tolls on the Internet.

The concessions go beyond those AT&T proposed in October. For example, it offered to sell fast DSL Internet access for $19.95 a month without requiring customers to buy phone service, the letter said.

The company also said it would repatriate 3,000 BellSouth jobs from outside the U.S. and pledged 200 jobs for New Orleans.

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