Federal Communications Commission chairman Reed Hundt, calling for an aggressive defense of the principles of competition embodied in the 1996 Telecommunications Act, said Thursday that a proposed merger by long-distance giant AT&T and former Bell operating company SBC is "unthinkable."
In a speech Thursday at Washington's Brookings Institution, Hundt said that a series of FCC orders to implement the 1996 law had brought the telecom market to "the eve of competition."
Hundt, who noted that telcos are attacking the FCC rulings in courts across the country, said "it is natural in this time of transition from the monopoly paradigm to the competitive regime for firms to explore the possibility of entry into new markets by way of merger. " He added that "hypothetical" comments from AT&T chairman Robert Allen about a possible merger with a Baby Bell were "right and proper."
Hundt added, however, that because of the damage that would be done to the competitive landscape, "a combination of AT&T and a (Baby Bell) is unthinkable."
AT&T operates long-distance service throughout the United States. SBC is dominant in local markets from Texas to California.
Neither AT&T nor SBC has commented on whether they are holding talks on a possible merge. Such a deal, if completed, would create a company with a stock market value of US$110 billion, making it the largest corporate merger in history.
