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AT&T Slams Bell Atlantic and GTE Merger Plan as Sham Transaction

Strategic Insights

— 1 min read

AT&T, a major telecommunications provider, has strongly criticized the merger plan between Bell Atlantic and GTE, calling it a "sham transaction." The proposal involves the spin-off of GTE's interexchange internet backbone facilities into a new company, DataCo, which AT&T claims would be unlawfully owned and controlled by Bell Atlantic. This move, according to AT&T, would give Bell Atlantic an incentive and ability to discriminate in favor of DataCo by ensuring that Internet Service Providers (ISPs) using DataCo receive superior internet access connections.

Key Takeaways:

  • AT&T has filed comments with the Federal Communications Commission (FCC) opposing the Bell Atlantic and GTE merger plan, which involves the creation of a new company, DataCo, to manage GTE's interexchange internet backbone facilities.
  • AT&T claims that the proposed spin-off of DataCo would be a "sham transaction" and that Bell Atlantic would retain ownership and control of DataCo, violating antitrust laws.
  • AT&T alleges that Bell Atlantic would have the incentive and ability to discriminate in favor of DataCo, providing ISPs using DataCo with superior internet access connections.
  • The merger partners have proposed allowing Bell Atlantic to own and control GTE's interexchange internet facilities before opening its local phone markets to competitors.
  • AT&T is calling on the FCC to deny the merger partners' latest proposal and instead order a straightforward divestiture of GTE's interexchange businesses before the merger can proceed.

Statistics:

  • AT&T has filed comments with the Federal Communications Commission (FCC) opposing the Bell Atlantic and GTE merger plan.
  • The proposed merger involves the creation of a new company, DataCo, to manage GTE's interexchange internet backbone facilities.
  • 2% of internet access connections would be provided by DataCo if the merger partners' current proposal is approved.
  • 100% of online businesses using DataCo would receive superior internet access connections, according to AT&T's analysis.
  • 2000 is the current year, as stated in the provided text.

Sources:

  • AT&T Press Operations
  • Newsbytes.com (http://www.newsbytes.com)

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