BT wants American telecoms merger blocked

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The Independent Online

BT has called on US regulators to block the $16bn (£9bn) merger of SBC and AT&T because the deal will leave America with a "classic duopoly" after the separate proposed merger of MCI and Verizon.

The two huge US telecoms mergers announced this year have left smaller players in the US, including BT, reeling from the competitive implications.

In a presentation submitted on 6 May to the Federal Communications Commission, the US telecoms regulator, BT said: "Left unchecked, the co-ordinated effect of the mergers would be to create a powerful duopoly that would have extraordinary market power - not just in their own regions but nationwide and internationally - that would be difficult or impossible for any other competitor to overcome."

BT is most worried about the impact of the mergers on two business areas specifically; global telecommunications services (GTS) and internet supply. GTS, one of BT's most important growth markets, is the provision of telecoms services to large, multinational companies across a number of countries.

In particular, BT argues that the SBC/AT&T deal will give the merged group the ability "to abuse its dominance" over access to its local networks which connect business users to the main core telecoms networks, contributing to what BT called the "vertical competitive threat".

"The best way to counter the vertical threat would be to block the merger," BT said. It claimed the situation would be compounded by the MCI/Verizon deal.

"BT is very concerned about the serious anti-competitive effects of the proposed concentration between SBC/AT&T followed by Verizon/MCI. Said concentrations will significantly impede effective competition, resulting in higher prices, lower quality and reduced innovation for business customers," BT said.

In the UK, BT faces similar arguments over the prices it charges smaller competitors for local access to the main telecoms network that BT operates.