Bell buyout blocked

[Seattle Times editorial]

Jonathan Adelstein and Michael Copps, the two Democrats on the five-member Federal Communications Commission, have thrown a monkey wrench into AT&T's proposed $18-billion buyout of Bellsouth Corp.

Good for them. More such mega-mergers need to be questioned, and blocked, to preserve diversity of ownership in America's industries of communication.

BellSouth is one of the regional pieces of the old Bell system. AT&T was the nationwide long-distance piece. The point of breaking up Bell in 1984 was to foster competition, which it did. But there are empires to construct by putting monopoly back together, and money to be made. Like the liquid-metal man Arnold Schwarzenegger fought in "Terminator II," monopoly may reconstitute itself.

Pooling these companies would create a new dominant provider of telephone, wireless and broadband services in much of America, including control of Cingular Wireless, the country's largest wireless company. The parties that stand to profit from this say it would spur innovation. We doubt it. These enterprises are financially large already. Neither needs a larger corporate bureaucracy to encourage its research department. This merger is about dominating markets.

Adelstein and Copps have been raising an alarm for several years over media concentration, and have been voted down, 3-to-2, by the commission's Republican members. This time, one of those members, Robert McDowell, has recused himself because of a possible conflict of interest, giving Adelstein and Copps the chance to tie the vote and deny AT&T federal approval.

They should block this merger. BellSouth and the other children of Ma Bell, including Qwest in our region, were not built as competitive industries. They were monopolies. The effort to create competitive markets in telephone service has been slow and painful, and it makes no sense to let Ma Bell put herself back together again.

article originally published at http://seattletimes.nwsource.com/html/editorialsopinion/2003303600_fcced16.html.

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