October 6, 1999
| Re: | In re Application of Ameritech Corp., Transferor, and SBC Communications Inc., Transferee, for Consent to Transfer Control of Corporations Holding Commission Licenses and Lines Pursuant to Sections 214 and 310(d) of the Communications Act and Parts 5, 22, 24, 25, 63, 90, 95 and 101 of the Commission's Rules. CC Docket No. 98-141. |
I write separately to emphasize that I have voted to approve this merger only because of the extensive market-opening commitments to which SBC and Ameritech have agreed, particularly those with regard to advanced services. As we compellingly demonstrate in the Order, absent those conditions, the merger could not survive public interest scrutiny.
A combined SBC/Ameritech will serve more than 55.5 million local exchange access lines. Thus, the combined company will have the incentive and, absent conditions, the ability to deny, degrade, or delay competitive LEC access to almost one-third of the nation's access lines. Moreover, the merger will eliminate one of only six major incumbent LECs as an independent source of observation, diminishing regulators' abilities to use comparative practices analyses to facilitate implementation of the Communications Act.
Like the majority, I believe that the public interest concerns detailed in the Order are not substantially mitigated by the transaction's potential public interest benefits absent conditions. I do believe, however, that the stringent conditions that SBC and Ameritech have voluntarily adopted will substantially mitigate the potential public interest harms of the proposed merger and should result in an overall public benefit. By voting to approve the transaction based on these conditions, I am accepting the companies' assurances that they will fully implement all the commitments they have made.
In particular, I believe that the proposed conditions related to advanced services will serve to increase residential and rural broadband choice and to provide competitors an increased ability to compete on fair and equitable terms. For instance, pursuant to the agreed upon conditions, SBC/Ameritech will provide xDSL services through an advanced services affiliate that must deal at arm's length for the purchase of collocation, loops, and other bottleneck facilities. The existence of a separate affiliate will, I believe, provide increased incentives for SBC/Ameritech to develop effective OSS, collocation, and unbundled element provisioning processes. As I have said previously, pro-competitive regulations work best when incumbents have an incentive to make them work. The separate affiliate structure holds the potential to create substantial public interest benefits if properly implemented. Accordingly, I expect SBC/Ameritech to comply fully with these commitments, like all the others, in order to ensure that the transaction produces these benefits.
Although I fully expect SBC/Ameritech to implement the agreed-upon conditions, I nonetheless could not support the proposed transaction absent reporting requirements. Such requirements create the sort of accountability I believe is required in the context of a transaction with the potential for such competitive harm. The agreed-upon requirements -- including monthly reporting of twenty performance measures and service quality reporting -- will keep the Commission apprised of SBC/Ameritech's performance in opening its region to local competition. Moreover, minimal reporting requirements regarding xDSL deployment will provide a reasonable way to ensure that the company follows through on its commitment that at least 10% of the urban wire centers and 10% of the rural wire centers where SBC provides xDSL will be low-income wire centers. Such reporting will also aid the Commission in its statutory obligation to monitor the deployment of advanced telecommunications capability.
Finally, I commend the work of outside parties and the public for providing useful input that helped shape the final conditions pursuant to which I have voted to approve the proposed transaction.