NATIONAL ASSOCIATION OF STATE UTILITY CONSUMER ADVOCATES
R E S O L U T I O N
Urging the Appropriate State Regulatory Agencies, the U.S. Department of
Justice and the Federal Communications Commission to Give Proposed
Mergers in the Telecommunications Industry Close Scrutiny to Assure that
Mergers Are Only Permitted if They Provide Positive Benefits Directly to
Consumers and that Mergers Do Not Inhibit Full and Effective Competition
and in the Event They Are Approved, Associated Benefits Are Flowed
Through to Ratepayers
WHEREAS, the primary purpose of the Telecommunications Act of 1996 (Act) was to open all telecommunications markets to effective competition;
WHEREAS, the Act also relaxed some regulatory restrictions, including aspects of media and telecommunications ownership;
WHEREAS, the mergers taking place in the telecommunications industries, especially mergers of some of the Regional Bell Operating Companies (RBOCs), at this critical stage of commencing the opening of the local telephone market threatens to upset the delicate balance in the Act for deregulation and competition;
WHEREAS, since the effective date of the Act, two RBOCs have been absorbed by other RBOCs through mergers;
WHEREAS, the industry has also seen a number of other mergers including the proposed merger of WorldCom and MCI, SBC Corporation and SNET, and the AT&T acquisition of TCG;
WHEREAS, on the heels of the Bell Atlantic/NYNEX and SBC/Pacific Telesis mergers, SBC Communications, Inc announced plans to merge with Ameritech Corporation to create the largest American telephone company in the nation’s largest telecommunications merger;
WHEREAS, this trend of mergers may lead to the curtailment of competition by the removal of competing firms with the size, expertise and revenue streams to provide effective competition;
WHEREAS, mergers and acquisitions in the telecommunications sector should be approved only if measurable cost efficiencies, guaranteed by the applicant firms through rate reductions to the customers will be realized and any inhibition or reduction in competition is minimal;
WHEREAS, claims of cost efficiencies and job creation resulting from the mergers should be closely scrutinized to determine whether these claims are realistic and supported by the history of such mergers;
WHEREAS, state regulators, the U.S. Department of Justice and the Federal Communications Commission must assure consumers that the mergers will not unduly consolidate market and economic power to forestall, thwart or discourage competition and will not pose major regulatory difficulties for the states by the sheer size of the firms; and
WHEREAS, when regulators approve mergers, they should attach conditions to the mergers to adequately safeguard consumers and ensure that ratepayers share equitably in merger savings.
THEREFORE, BE IT RESOLVED that the National Association of State Utility Consumer Advocates (NASUCA) urges state regulatory agencies and the Federal Communications Commission to review mergers in the telecommunications industry based on the highest standard of the promotion of the public interest and on the enhancement of effective competition in telecommunications markets so that consumers can reap the promises of the Act with better quality service, lower prices and more choices in service and providers and in the event they are approved, associated benefits flow through to ratepayers;.
BE IT FURTHER RESOLVED that NASUCA urges the U.S. Department of Justice to review proposed mergers with a critical eye toward carrying out the competitive purposes and goals of the Act; and
BE IT FURTHER RESOLVED, that NASUCA authorizes its Executive Committee to develop specific positions and to take appropriate actions consistent with the terms of this resolution. The Executive Committee shall advise the membership of any proposed action prior to taking action if possible. In any event the Executive Committee shall notify the membership of any action pursuant to this resolution.
Approved by NASUCA:
Submitted by:
Seattle, WA
NASUCA Telecommunications Committee
June 10, 1998
Martha Hogerty (MO), Chair
Charlie Beck (FL)
Regina Costa (CA)
Theresa Czarski (MD)
Elliot Elam (SC)
Douglas Elfner (NY)
Simon ffitch (WA)
Karen Hardie (OH)
Alice Hyde (IA)
Wayne Jortner (ME)
Heikki Leesment (NJ)
Karen Long (NC)
Thomas Lyle (NH)
Robert Manifold (WA)
Philip McClelland (PA)
Michael McNamara (CA)
Garth Morrisette (MN)
Thorvald Nelson (CO)
Laurie Pappas (TX)
B. Robert Piller (NY)
Julie Rones (DC)
Amy Schwab (VA)
Timothy Seat (IN)
Michael Travieso (MD)
Charles Van Dyke (NV)
Richard Wiener (NM)