AT&T and BellSouth have made public a list of conditions the two companies have suggested to the Federal Communications Commission to pave the way to approval of their merger, but at least one merger opponent is saying those conditions amount to short-term salves to long-term problems the merger will create.

In a document made public late Friday, AT&T and BellSouth said it would be willing to make broadband access – at speeds of 200 kilobits per second and up – available to 100% of its region and to take a number of steps designed to enable its competitors including freezing prices on unbundled network elements and collocation, on T-1 and DS-3 special access services, on interstate tariffs for special access, and on existing tandem transit services. The promise not to raise T-1/DS-3 prices would expire 30 months after the merger closed.

Other possible merger conditions mentioned in the document included: offering ‘naked’ ADSL service to ADSL-capable customers within 12 months of the merger; selling ADSL wholesale to other ISPs at market prices; agreeing not to seek forbearance from resale rules (as Verizon did, successfully) for 30 months after the merger closes; and launching 10 new broadband wireless trials, including five with BellSouth’s territory. BellSouth is already conducting broadband wireless deployments.

Many of the conditions seemed to try to directly address the concerns of competitive carriers, who fear the consolidation of power within AT&T and Verizon will ultimately eliminate their access to last mile loops needed to reach customers. For example, five separate possible conditions addressed the special access issue, including possible promises not to “provide special access offerings to its wireline affiliates that are not available to other similarly situated special access customers on the same terms and conditions.”

AT&T and BellSouth stated, in the documents made public Friday, that the two companies still believe the merger should go forth unencumbered by conditions but in the interests of speeding up the process, are willing to negotiate conditions.

Jonathan Lee, general counsel to Comptel, the trade organization for competitive service providers, said the conditions being set forth by AT&T amount to “short-term palliatives” for a merger that will produce “long-term structure changes” within the industry.

“We don’t think these are satisfactory, and we think the commission should reject the merger,” Lee said. “It’s notable that AT&T never mentions what problems these conditions are supposed to solve. People have raised very significant concerns about the long-term damage this merger could cause.”

Because many of the conditions carry 30-month – or shorter – deadlines, they won’t really serve to sustain and encourage competition, he added.
Competitors would not be able to develop business plans and gain access to capital in such a short time frame, Lee said.

Comptel believes that with Commissioner Robert McDowell abstaining and the two Democratic commissioners – Jonathan Adelstein and Michael Copps – showing their dismay at the lack of merger conditions imposed by the Department of Justice, there could still be a possible rejection of the merger, he said.