Saying the merger will lead to poor service and create
a monopoly situation, consumer groups are asking officials
in towns that are holding public hearings on the matter--Cambridge,
Mass.; San Francisco; Dallas; and Montgomery County,
Md.--to refuse to transfer the cable franchises, or
service contracts, affected by the AT&T-Comcast
merger.
The Consumer
Federation of America (CFA), an association of 280
state and local affiliates, is working on the campaign,
the group said Tuesday.
In April, U.S. senators also questioned the impact
that the deal could have on programming and Internet
access. They said the size of the company--which would
have 22 million subscribers--could lead to a bias against
unaffiliated programming and could limit consumer choice
for Internet service. However, they said the merger
did not present antitrust concerns.
"This merger places consumers at severe risk by creating
pressures to cut costs and reduce capital spending,
which will undermine service quality," said Mark Cooper,
director of research for the CFA.
The $72 billion AT&T merger was made official
in December.
"With every merger we lose more of the local touch
that people crave in their transactions," said Paul
Schlaver, chairman of the Massachusetts Consumer
Coalition, which is also working on the campaign.
"There's a general malaise in people's minds because
state authorities and the Feds don't want to play an
active role, so the burden falls on us," he added.
Cable companies seeking a local "franchise," or the
right to offer cable service in a town, need permission
from local authorities. These authorities are likely
to refuse franchises, or agree to them only under the
condition that they agree to provisions such as "open
access" and certain pricing structures, many people
involved have said.
When AT&T started buying cable companies in 1998,
the big local phone companies mounted an expensive campaign
for open access. Pushed by the phone companies, open
access requires cable companies to share their wires
with rivals, just as phone companies have been required
to do.
AT&T spokeswoman Claudia Jones said open access
won't be an issue since AT&T has "said all along
that we're open to more than one ISP on our broadband
lines." AT&T has deals with EarthLink; Net1Plus,
a regional ISP in Massachusetts; and Internet Central,
a regional ISP in Seattle.
In addition to open-access issues, the CFA is recommending
that local authorities examine pricing, the possible
loss of senior discounts, quality-of-service issues
and financial-responsibility standards.
"I've been involved with cable issues for a long time,"
Schlaver said. "One of my gripes has been that there
are just endless price increases, and services keep
going down," he added.
The open-access issue was at the heart of what AT&T
faced in 1999 in Portland, Ore., after its merger with
TCI. City officials would not allow
the transfer of local cable franchise licenses from
Tele-Communications Inc. (TCI) to AT&T, saying the
company had to offer a choice of ISPs. At the time,
AT&T didn't have the technology to do that, so it
didn't launch high-speed Internet services in Portland.
That legal case is still before the 9th Circuit Court
of Appeals.
The battle
over open access has diminished somewhat over the years
as the big cable companies have agreed to let outside
ISPs such as EarthLink offer cable modem services over
their wires. The open-access issue has yet to be
resolved by the Federal Communications Commission, and
it isn't likely to be mandated within the next three
years, Boston-based researchers The Yankee Group wrote
in a recent report.
