Outspoken advocates of a two-tiered Internet will soon share a single corporate structure as AT&T will shell out $67 billion to acquire BellSouth.
AT&T CEO Ed Whitacre and BellSouth CTO William Smith have publicly demanded from their separate corporate fiefdoms that major Internet players like Google and Microsoft need to pay more for their heavier usage of the networks that get their content to Internet users. Now the two men can spend plenty of time together crafting statements calling for that two-tiered Internet.
The Wall Street Journal reported the deal that will bring BellSouth back into the AT&T fold. The move looks like a reassembly of the old AT&T, which was broken up 22 years ago in order to create competition in the telecom marketplace.
Approval of the deal still requires regulatory approval from the FCC. That prospect doesn’t trouble Whitacre, the WSJ noted:
“There will be some who say we’re putting the Bell system back together,” he said in an interview. “But this is a different world.” The AT&T-BellSouth deal and Verizon’s acquisition of MCI were approved with a few minor conditions attached, despite concerns they would lead to higher prices for business customers.
Also, the Journal cited a Bell-friendly environment within the Bush Administration and the FCC that should lead to a quick rubber-stamping of the merger. Competition with cable and VoIP companies, both providing phone services, look like the points that will enable the FCC to endorse the deal.
The aftermath of the deal leaves AT&T and Verizon as the two top telecoms in the United States. Verizon CEO Ivan Seidenberg is also an advocate of the two-tiered Internet model.
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David Utter is a staff writer for Murdok covering technology and business.
