WASHINGTON-A key House lawmaker today said the proposed $36 billion merger between Sprint Corp. and Nextel Communications Inc. would bring added competition to a broadband market currently dominated by Bell telephone companies and cable TV giants.
“The combination of Sprint and Nextel will create a broadband giant in the wireless industry that has no affiliation with the Bells. We should not be wary of the combined entities; we should welcome them,” said House Commerce Committee Chairman Joe Barton (R-Texas). Barton then repeated the statement for emphasis.
Indeed, no lawmaker directly challenged the Sprint-Nextel deal at this morning’s hearing.
Most of the attention was focused on Verizon Communications Inc.’s $6.75 billion pitch for No. 2 long-distance carrier MCI Inc. and SBC Communications Inc.’s $16 billion play for AT&T Corp., the No. 1 long -distance operator.
Barton and some Democrats said the recent wave of telecom mergers should come as no surprise, given the dramatic technological and market changes since the passage of the 1996 telecom act.
But Rep. Edward Markey (D-Mass.), ranking member of the House telecom subcommittee; Rep. Heather Wilson (R-N.M); Rep. Anna Eshoo (D-Calif.); and consumer groups said the rash of telecom mergers posed potential problems for consumers and competition.
When prodded by Markey, neither SBC Chief Executive Officer Edward Whitacre nor Verizion Chairman Ivan Seidenberg would pledge that consumer bills would not rise as a result of the blockbuster deals.
“The telecom industry is broken and needs to be fixed. Congress must fundamentally break apart the current ‘Ma Bell’-reminiscent model in its rewrite of the 1996 Telecommunications Act,” said Gene Kimmelman, senior director for public policy at Consumers Union. “It must bring more competition and choice to the marketplace, such as by opening up the basic telecom infrastructure to competitors and encouraging and upholding the ability of municipalities to build out their own broadband networks. Only then will we have a chance at providing affordable telephone and high-speed Internet service to all consumers.”
