[bobdreamz]

FCC seals $86B AT&T-BellSouth merger
The telecommunications giant gave into FCC demands on net neutrality, prices, Internet service and jobs to close the deal.
December 29 2006: 7:22 PM EST


NEW YORK (CNNMoney.com) -- The FCC announced the approval of AT&T's acquisition of BellSouth in a deal worth $86 billion Friday afternoon, after AT&T gave additional commitments regarding billing, Internet availability and jobs.

The No. 1 telecommunications company's commitments included a promise to maintain net neutrality for at least 30 months, the promise of $10 high-speed Internet service to customers in traditional phone service areas and the repatriation of 3,000 offshore jobs from BellSouth's (Charts) operations.

Net neutrality allows all sites on the Internet equal access to the bandwidth consumers need in order to access them.

Telecommunications trade groups have been lobbying to end net neutrality in favor of a tiered-bandwidth approach.

To win FCC approval, AT&T also agreed to freeze prices and price caps for some wholesale rates to give competitors access to AT&T's network. The freeze will last 48 months, longer than AT&T's initial offer of 30 months.

In a letter to the FCC, AT&T (Charts) called the commitments "wholly unnecessary in light of the demonstrated substantial public interest benefits of the merger," but said they were made to facilitate "the speediest possible approval of the merger by the commission."

"Even with these conditions, we will be able to realize the substantial benefits of this transaction for our customers, shareholders and employees," said Michael Coe, spokesman for AT&T.

The company plans to immediately integrate AT&T, BellSouth and Cingular wireless - a joint venture between the two companies - and traditional networks, combine product offerings and customer service operations, according to a release.

The combined company will also be able to expand the reach of its broadband services in remote and rural locations in BellSouth's southeast area.

The 4 voting members of the FCC board were divided along party lines over the approval of the merger. A fifth member, who had previously worked as a lobbyist in the industry before joining the FCC, had recused himself from voting on the matter.

Two Republicans had sided with the telecommunications companies and their trade representatives while two Democrats, along with industry watchdogs and consumer trade groups, had previously opposed the deal.

The FCC's two Democrats, Jonathan Adelstein and Michael Copps, criticized the Justice Department's antitrust division for backing the deal without imposing any conditions and saying it would not substantially hurt competition.

Now that the deal has been approved, Doug Christopher of Crowell, Weedon & Co. says AT&T should not have a difficult time integrating BellSouth in part because, "BellSouth was always the cleanest of all the Baby Bells."

"BellSouth never got entangled in the overspending and overbuilding that SBC and other Baby Bells did," Christopher said, noting also that BellSouth's region is a long growth area.

Crowell, Weedon & Co. and its partners own shares in AT&T and BellSouth.

The acquisition of BellSouth cements AT&T's No. 1 position against telecommunications rivals such as Verizon (Charts) and Sprint Nextel (Charts).

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I wonder what implications there will be for Atlanta if any?

[jason21atl]

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I wonder what implications there will be for Atlanta if any?

An article in the AJC about the merger today said there would be almost no blue collar job losses but upwards of 1,000 white collar job losses.

[kardon]

I was an employee of BellSouth for 5 years. To my surprise, many wanted the merger. They will now be able to offer many other services. Example: Stand alone dsl service for appx $20.00/month. I have comcast and i pay $45.00 for broadband because i don't have a home phone. Because BellSouth didn't offer stand alone dsl, comcast has gotten away with higher prices. From a innovative stand point..AT&T will be much better. Atlanta will lose the HQ..but Atlanta is strong. We wont fade because of this merger. I'm glad its over..and Atlanta will move on.

[Fiorenza]

The net effect of the merger will be very positive. Bellsouth's main problem seemed to be a certain stodginess that exhibited symptoms of unwillingness to take measured risks by implementing innovations, and not getting ahead of the curve in too many cases. They were focused on measures other than being lean and competitive.

[Blazer85]

So I wonder now if the BellSouth Tower in Birmingham (and the others throughout the south for that matter) will eventually be renamed to AT&T.

[DruidCity]

Bellsouth's main problem is that their call center in India keeps calling me every few days to try to convince me to "upgrade" my service. It's annoying as hell. Hopefully, AT&T will be easier to deal with.

[austin356]

As for me:

"PRAYS FOR U-VERSE"




Comcast sucks so ........censored............ bad with their High Definition lineup that I would pay whatever ATT wants to charge me for Uverse.

[sabino86]

Well, looks like they are already making changes...

http://img.coxnewsweb.com/C/08/85/01/image_5001858.jpg

(Photo from AJC on Sunday)

Guess I'm gonna have to change my avatar. ;)

[AubieTurtle]

I liked it better when it was the headquarters of OPC in RoboCop 3.

[sabino86]

I liked it better when it was the headquarters of OPC in RoboCop 3.


And when Atlanta was a stand in for Detroit too :haha:

[AubieTurtle]

And when Atlanta was a stand in for Detroit too :haha:

It was funny to see them in the Gulch as a MARTA train passed by. They put some panels on it to try to make it look futuristic. Merely having heavy rail in Detroit would be futuristic.

I wonder what the merger means for office space. I know Lindberg City Center was a consolidation of many BellSouth offices spread across the city. If they still have white collar workers in spread around in buildings other than Lindberg and the Midtown tower, hopefully any cuts will result in consolidation into those two main locations. I'd hate to see either of those locations go through what 191 went through.

[sabino86]

It was funny to see them in the Gulch as a MARTA train passed by. They put some panels on it to try to make it look futuristic. Merely having heavy rail in Detroit would be futuristic.

I wonder what the merger means for office space. I know Lindberg City Center was a consolidation of many BellSouth offices spread across the city. If they still have white collar workers in spread around in buildings other than Lindberg and the Midtown tower, hopefully any cuts will result in consolidation into those two main locations. I'd hate to see either of those locations go through what 191 went through.

Chances are AT&T will sell the Cingular headquarters at I-285/GA 400 and move them to the Midtown campus. I don't see them giving up that building in the forseeable future. Hell, I remember when it was Southern Bell's headquarters (with no BellSouth name on it).

[whoDean]

I understand the company will have a lot of unused property throughout the area.

[Fiorenza]

I understand the company will have a lot of unused property throughout the area.

If they want to dump office property, it may be a good time to do it, if this outlook by ABC is on target (http://atlanta.bizjournals.com/atlanta/stories/2007/01/01/story1.html?b=1167627600^1396083)

[alexjon]

I can't wait til AT&T consolidate all their national HQs into one single city-- all these far-flung headquarters are so confusing

[Fiorenza]

It won't be Portland.

[alexjon]

No, I was thinking of Atlanta. The main HQ should be that, and not some little central brain with a ton of buildings in other cities. Keep AT&T in its home, not some gathering of other cities.

[Fiorenza]

THe HQ will be San Antonio. More power to them. Regarding Atlanta, all Atlanta needs do to grow, is continue attracting well-qualified young people and keep down the cost of housing, and it will continue to develop with no problem.

Anyway, why would you think it's possible or practical to put the employees of AT&T in just one city, or even 10 cities?

[alexjon]

Well, I wasn't sure of the size of the entire operation that lays outside of the blue collar realm-- if it's much larger than I am thinking, then yeah, okay, I like the spread out organization, but this multi-city thing is really confusing and it's hard to keep up with.

[AubieTurtle]

All those well qualified young people need jobs. And yes, the HQ will be San Antonio and is unlikely to move unless the head of the company dies or leaves.

AT&T will now provide local phone service from coast to coast in a territory of more than 100,000,000 people. That requires a huge amount of phyical plant across the country that can not easily be managed out of one mega headquarters. Long before the originial AT&T was broken up it had regional headquarters. Even with advances in communications and management, a company providing services like POTS over such a large area will not be able to consolidate in one place.

[Fiorenza]

Alexjon,

Don't worry about it. Just consider the synergies and enhanced competitiveness of the merged company. We were thinking of Bell South as a dinosaur, but now with AT&T they will be in the forefront of the telcom sector, setting the standards and being a key player.

[alexjon]

OK, to bring this a bit more on-topic: Am I a dreamer for hoping they build something really modern as far as a new HQ building? It might be too soon for ATL, but San Antonio's buildings are old-- having two matching HQ buildings would be awesome.

[AubieTurtle]

Signature buildings are as much about marketing as they are about ego. In the old monopoly days of AT&T, the built their buildings both for utilitarian reasons and to denote strength and uniformity. Since they certainly don't have a monopoly in the the wireless space, and there is some competition from the cable companies in local phone service, it is possible they may want to build something that will grab the public's attention and say that they're a dynamic and cutting edge company. From a marketing point of view, it would be a good idea. From an operations point of view, unless a new building gives them an efficiency benefit that justifies the expense, they will stick with what they have. Of course ego does play its part, but in a competitive marketplace, ego can only go so far in spending money before the shareholders get mad and sell (or demand a change in leadership).

[alexjon]

Well, looking into the situation, the buildings they currently have in San Antonio are brutally inefficient and almost useless.

That could be the catalyst and I hope they jump at this chance

[MarketsWork]

If they want to dump office property, it may be a good time to do it, if this outlook by ABC is on target (http://atlanta.bizjournals.com/atlanta/stories/2007/01/01/story1.html?b=1167627600^1396083)

That was a very interesting article, Fiorenza. Included in it was this intriguing little snippet:

Historically, noted Cushman & Wakefield's Ashley, most of the good credit tenants in Midtown have either come from within the market or from downtown. However, Staubach's Gibbs said he's aware of large Buckhead tenants who are scouting in Midtown because of the "excitement" being generated in the submarket.

Now that is very interesting.

[sabino86]

All those well qualified young people need jobs. And yes, the HQ will be San Antonio and is unlikely to move unless the head of the company dies or leaves.

AT&T will now provide local phone service from coast to coast in a territory of more than 100,000,000 people. That requires a huge amount of phyical plant across the country that can not easily be managed out of one mega headquarters. Long before the originial AT&T was broken up it had regional headquarters. Even with advances in communications and management, a company providing services like POTS over such a large area will not be able to consolidate in one place.

Hence why the BellSouth Center in Atlanta was at first AT&T's regional headquarters for Southern Bell/South Central Bell until the 1984 divestiture.

[Corinth940]

And when Atlanta was a stand in for Detroit too :haha:

Quick topic drift here...I didn't know Atlanta was also used as a stand in for Detroit. I know Dallas was used as a stand in for many scenes in the first RoboCop movie. In fact, if I remember right, the scenes that showed the deserted and gritty looking factory where the bad guys were hiding near downtown Dallas (excuse me, downtown Detroit) is now the Victory project site next to the American Airlines Center. That old "factory" is long gone...

Interesting how the film never filmed Detroit in Detroit...:shrug:

Okay, topic drift over...

[Andrea]

Quick topic drift here...I didn't know Atlanta was also used as a stand in for Detroit. I know Dallas was used as a stand in for many scenes in the first RoboCop movie. In fact, if I remember right, the scenes that showed the deserted and gritty looking factory where the bad guys were hiding near downtown Dallas (excuse me, downtown Detroit) is now the Victory project site next to the American Airlines Center.

I wonder why they choose one city's gritty deserted factories over another city's gritty deserted factories? Just about every town in America has loads of them. Maybe it's just a matter of who's cheapest and who has the best weather.

[sabino86]

I wonder why they choose one city's gritty deserted factories over another city's gritty deserted factories? Just about every town in America has loads of them. Maybe it's just a matter of who's cheapest and who has the best weather.

Because Hollywood doesn't think of Atlanta as nothing more than the "nondescript American metropolis", meaning it can stand in as any city (kinda like Toronto).

Of course, there are exceptions, such as...

http://www.impawards.com/1939/posters/gone_with_the_wind_ver1.jpg
...which was actually filmed in Hollywood and premiered at what is now the Georgia-Pacific Building

http://www.impawards.com/1981/posters/sharkys_machine_ver2.jpg
...a good look at early 1980s Atlanta, when the Westin was the undisputed tallest and when Midtown was a barren wasteland. Plus this movie is badass. :tup:

There are actually a lot of movies set/filmed in Atlanta, but most of them suck. I dare you to prove me wrong. ;)

[Andrea]

There are actually a lot of movies set/filmed in Atlanta, but most of them suck. I dare you to prove me wrong. ;)

Oh, Smokey and the Bandit and Driving Miss Daisy were both good flicks. Manhunter was pretty interesting, too.

I was working downtown when they were shooting Sharky's Machine, so we got to see all the action and the stars. There was one very exciting scene when they crashed a car at the old hotel skeleton on Luckie Street.

But what I was really wondering about is why they choose one city's abandoned factories rather than another's. They all look pretty much the same to me. Maybe it is just the convenience and the weather.

[NEWNANGuy]

so what's gonna happen with Cingular Wireless now?

[shanthemanatl]

so what's gonna happen with Cingular Wireless now?

I believe AT & T has said that the headquarters for Cingular will remain here for the next two years or so. After that, I think they've been fairly non-committal about whether it will remain here, move to San Antonio, or somewhere else.

I'm sure there will be some serious lobbying on Metro Atlanta/Georgia's part to keep it here.

[DonTallPaul]

I believe AT & T has said that the headquarters for Cingular will remain here for the next two years or so. After that, I think they've been fairly non-committal about whether it will remain here, move to San Antonio, or somewhere else.

I'm sure there will be some serious lobbying on Metro Atlanta/Georgia's part to keep it here.

Yeah, sounds like either a play to squeeze concessions out of the state or simply delaying the need to make a decision while they digest the larger Bellsouth/AT&T merger. My guess would be the first, tap dance a little to earn some consessions.

[sabino86]

So...when do ya think they're gonna take down the big sign at the top of the BellSouth Center and change it to AT&T?

Remember, I get dibs on one of the Bell logos. :D

[joey]

^ Speaking of which . . . I'm curious who owns the rights to the Bell logo now.

Pre-1984, obviously, AT&T owned it. As part of the breakup, the right to use the logo went to the "baby bells" (and so AT&T introduced the iconic globe).

BellSouth is the last of the original Bell Operating Companies to use the bell logo. Two independent local-exchange carriers (Cincinnati Bell and SNET) which weren't owned by AT&T either no longer use the Bell logo either or have been acquired by AT&T, as of August 2006.

Thus, after this merger, there will be no companies using the famous Saul Bass-designed Bell logo, though, conceivably, all of the remaining BOCs have an ownership in it.

I wonder if AT&T would be able to bring back the insignia.