Archives: Phones & Cell Phones

Consumers Union joined with other consumer, civil rights and disability rights groups in California in protesting the proposed merger of telecom giants SBC and AT&T. Consumers Union, along with The Utility Reform Network, the Utility Consumers’ Action Network, the Disability Rights Advocates, the Greenlining Institute, and Latino Issues Forum asked the California Public Utilities Commission to follow state law and investigate to ensure the proposed merger does not harm California consumers.

The proposed merger “puts Humpty Dumpty back together again,” by reassembling the bulk of the old “Ma Bell” that existed prior to the divestiture of the Regional Bell Holding Companies from AT&T. The divestiture, and later the Telecommunications Act of 1996, were intended to inject some competition into telephone markets. Instead, misguided regulatory policies and mergers are squeezing emerging competitors out of the market.

Unlike most other states, California law requires telephone companies to show how the proposed merger will benefit consumers. However, SBC and AT&T have failed to bring forth any credible evidence that the merger won’t further limit competition. Cell phones and Voice over Internet Protocol (“VoIP”) are not reliable substitutes for basic phone service, and in most cases cost consumers more than their current landline phone bills. SBC and AT&T have also maintained an ominous silence about the effects of the proposed merger on service quality – and the availability of advanced services – in California.

The merger could have a devastating impact on consumers in underserved communities –including low-income and minority consumers, disabled consumers and rural consumers – will receive any benefits of the merger. The companies have failed to provide any assurance that these communities won’t be harmed – as shown by our filing and others, including the California Community Technology Foundation.

We are calling on California regulators to follow the law, hold a hearing, and make SBC and AT&T prove that the merger will indeed benefits consumers as they claim. If, as we expect, these giants can’t prove the merger won’t harm consumers and competition, the merger should be blocked.

To find out more about these mergers at a national level go to Remaking the Telecom Industry.