Commissioners Approve SBC-AT&T Merger

Add Landmark Consumer Protections for Customers Choosing Bundled Services PHOENIX After more than eight hours of debate and discussion of amendments intended to protect consumers, Arizona Corporation Commissioners voted unanimously to approve the $16 billion merger of SBC and AT&T. Company officials promised a higher profile in Arizona and more service offerings for consumers once the merger is completed. Convergence was the buzzword heard throughout the proceedings. New technologies like Voice over Internet Protocol (VoIP) and emerging broadband communication options blur the line between phone service and information services. Consumers are increasingly adopting these technologies while also demanding that the new technologies offer the same reliability and dependability of traditional wireline service. Many of these emerging services fall outside the Commissions traditional regulatory authority. With no place to turn except the FCC in some cases consumers who have problems with billing or unauthorized charges are frustrated that local officials cannot assist them. That will not be the case for customers choosing bundled services from SBC/AT&T. Commissioner Marc Spitzer, who expressed great frustration at wireless companies that have fought every effort to provide meaningful consumer protections, sponsored an amendment that will give residential customers the opportunity to come to the Commission to resolve their claims through arbitration. Arbitration is a form of alternative dispute resolution an alternative to litigation giving the disputing parties a neutral third party to assist in resolving the dispute. Under this Commission Order, for the first time, Arizona wireless and VoIP customers will have a right to arbitrate billing disputes, Commissioner Marc Spitzer said. Although this order applies only to Arizona customers of the merged SBC and AT&T, I will not rest until these benefits are accorded to all consumers of wireless and VoIP services. I look forward to SBC/AT&T being an active competitor in Arizonas telecommunications industry. The formation of an arbitration process for the companys residential customers is a groundbreaking advance for consumer protection, Commissioner Mike Gleason said. Commissioner Kris Mayes also offered an amendment dealing with the promised benefits of the merger. Her amendment requires the company to file an annual Consumer Benefits Report detailing the following: * any cost savings that have resulted from the merger; * the companys efforts to provide stand-alone DSL in Arizona; * how AT&T Labs has benefited Arizona consumers; * the companys efforts to expand VoIP offerings in Arizona; and * any rate reductions that have been implemented by the company. The first report is due no later than December 31, 2006 and for four years thereafter. The companies testified that they do not have plans to cut their Arizona workforce but an amendment also passed that requires the company to notify the Commission if it chooses to conduct any layoffs or facility closings that are attributable to the merger. The report will also have to explain why it was necessary to take either action, if and when savings associated with the merger will be reinvested in Arizona and whether any of the $2 billion in stated efficiencies from the merger resulted from changes in its Arizona operations. Company officials testified that SBC and AT&T do not have a lot of overlapping services and that the merger will allow them to compete in Arizona with a comprehensive bundle of the latest telecommunications services. This merger brings another company into the competitive market for telecommunications and information services in Arizona, Commissioner Bill Mundell said. Competition means lower prices for consumers and with the protections we added this is a win-win for consumers. This case proves that the Commission isnt a rubber stamp for big business. We used this opportunity to strengthen protections for Arizona customers, Chairman Jeff Hatch-Miller said. The result of this merger will be greater competition, a stronger company and, we hope, satisfied customers who can customize a communications package to their needs. The FCC approved the merger in late October. Ohio regulators approved the merger on November 4, 2005. California is the final state that must approve the merger before the transaction can be completed. When the amendments have been incorporated into the final document and once the order has been signed by all five Commissioners, it will be posted in the e-Docket system under case T-03346A-05-0149. A link to the e-Docket database is posted on www.azcc.gov.