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Press Release |
Contact: Gene Kimmelman, kimmge@consumer.org |
WASHINGTON - The Federal Communications Commission should negotiate a better deal for consumers before the agency approves the merger sought between AT&T and TCI, according to a coalition of consumer organizations.
"Consumers have received too many empty promises of competition tomorrow in return for rate increases today," said Gene Kimmelman, co-director of the Washington Office of Consumers Union, a member of this coalition. "It is time for regulators to either make sure these mergers have built-in protections against unfair rate hikes and anti-competitive practices, or just reject mergers that combine existing monopolies and promise to reform their behavior in the future."
Five groups wrote to ask the FCC to deny the application to merge AT&T and TCI without additional structural and behavioral conditions imposed to protect consumers from price hikes and anti-competitive activities. The coalition of groups included Consumers Union, publisher of Consumer Reports magazine, the Media Access Project, the Consumer Federation of America and the United Church of Christ, a Protestant denomination charged with conducting a ministry in the mass media.
"AT&T is now engaged in a risky, capital intensive venture," said the groups in their FCC petition. "One easy source of revenue is TCI's current cable customers, who have already been suffering serious rate increases…Other potential victims are AT&T's low volume long distance customers who do not make enough calls to benefit from long distance volume discount plans."
The FCC needs to use its power to seek changes in the "public interest" to force protections for consumers that prohibit AT&T and TCI from:
The groups contend that the heavy expense of providing competitive residential local exchange service over TCI's cable lines could result in current customers being required to absorb steep rate hikes. Reports indicate it may cost AT&T up to $10 billion to fully upgrade the plant to provide both phone and Internet access n these cable lines, although AT&T officials expect it will cost half as much.
This merger could be the first opportunity of most American citizens to obtain the speed and quality of high bandwidth Internet access, however consumer groups worry about TCI's current business practices with "@Home." The groups say there is evidence that TCI has begun to "exert its legendary, vise-like control over the previously free-form and truly democratic medium of the Internet."
TCI has signaled they intend to make Internet access available only as a bundled offering which forces all customers to purchase @Home's proprietary content. TCI would have exclusive control over all news, entertainment, information, hyperlinks and commerce through it's mandatory portal, and has an opportunity to play favorites with different commercial and political interests, the groups say.
"Allowing what will be in many cases be the only broadband supplier to impose censorship of this kind is profoundly anti-competitive and ominously restrictive of speech diversity and First Amendment values," the groups wrote to the FCC.
