AT&T will accept conditions from the FCC in order to get approval for a merger with BellSouth, the telephone giant's Friday, October 13th filing with the Commission indicates.

Their memo, "Potential Merger Conditions" begins with an opening statement that extols the buyout as the creation of a "more innovative company capable of accelerating and expanding the delivery of high quality advanced technologies and services to all classes of customers, large and small." The filing also declares that the merger will "strengthen national security," although AT&T does not explain how.

The conditions to which AT&T says they will agree include:

• Language on services to be offered to existing customers without raising prices. These include broadband Internet complimented by the replacement of dial-up access with an ADSL (asymmetrical digital subscriber line) modem. Similar language addresses Special Access Services, or private line customers, who will not receive increased rates.
• AT&T won't raise state approved prices on Unbundled Network Elements (UNEs), or the parts of a network that incumbent local exchange carriers (ILEC) are required to offer on an unbundled basis.
• Concerning low income areas, AT&T/BellSouth will commit "30 percent of the incremental deployment" of broadband services to "rural areas or low income living units".
• Under the proposal, disaster recovery capabilities will be available by June 1, 2007. AT&T/BellSouth will donate $1 million to a foundation or public entity to further promote public safety. The proposal will also initiate ten trials of broadband Internet access, five of which will be conducted in BellSouth territory.
• Regarding Net Neutrality: "effective on the Merger Closing Date, and continuing for thirty months thereafter, AT&T/BellSouth will conduct business in a manner that comports with the principles set forth in the FCC’s Policy Statement, issued September 23, 2005." The statement committed the FCC to encouraging an open Internet, but FCC Chair Martin stepped back from back from endorsing any kind of intervention on the matter. "I remain confident that the marketplace will continue to ensure that these principles are maintained," he said. "I also am confident, therefore, that regulation is not, nor will be, required."

In addition to the mentioned conditions, the letter closed stating that further discussion between ATT/BellSouth and the FCC included "the possibility of further conditions relating to the repatriation to BellSouth territory of jobs that had been expatriated to overseas locations, Internet backbone peering arrangements, network neutrality non-discrimination, and the impact of Commission forbearance decisions on any conditions that might be imposed."

Last week the FCC put off making a decision about the proposed merger twice, the second time after smaller telcos and the Commission's two Democrats complained that AT&T had contacted agency staff, in apparent violation of "Sunshine" rules prohibiting such discussions just before an FCC ruling.

The FCC has released AT&T's proposal for public comment. Interested parties can file statements with the Commission until October 24th.

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