**JOINT STATEMENT OF**

**CHAIRMAN KEVIN J. MARTIN AND**

**COMMISSIONER DEBORAH TAYLOR TATE**

Re: *AT&T Inc. and BellSouth Corporation Application for Transfer of
Control*, WC Docket No. 06-74

The telecommunications market continues to be a dynamic one. New
technologies and services are continuing to transform every aspect of
our lives. The merged AT&T/BellSouth (AT&T) promises to offer consumers
a wider array of IP-enabled services, including voice, data, wireless,
and video services. In particular, the merger will enable the combined
company to accelerate its deployment of broadband and IPTV in the
BellSouth region. The merger also will enhance national security by
creating a stronger and more efficient U.S. supplier of critical
communications capabilities. Further, the merger will allow the combined
entity to expand its global reach and be better positioned to provide
the broad range of communications services that enterprise customers
demand. As a result, today the Commission finds that this merger will
further many of its broadband, competition, and public safety priorities
and finds that the merger, on balance, will serve the public interest.

In particular, this merger promises to result in greater competition in
the broadband and video markets. Broadband deployment to all Americans
remains one of the highest objectives for us at the Commission. This
deployment is critical to our nation's competitiveness in the global
economy and to our national security. All consumers should expect to
benefit from this technology. The merging parties recognize this and
continue to deploy high bandwidth broadband to consumers. This merger
will enable the combined entity to build upon the progress the companies
have individually made in the deployment of broadband technologies in
the combined territory.

The merging parties are also engaged in plans to deploy IPTV service
throughout their territories to compete with other video providers, like
cable and satellite. By enhancing the ability of new entrants to provide
video services, we are advancing our goal of universal affordable
broadband access for Americans, as well as our goal of increased video
competition. Greater competition in the market for the delivery for
multichannel video programming is a primary and long-standing goal of
federal communications policy. Consumers across the country will reap
the benefits of this new competition -- and sooner as a result of this
merger. The addition of new entrants in the video marketplace holds
prices down and improves service. The additional competition, as well as
the nature of IPTV, will also improve the availability and control of
content that American consumers demand. Moreover, the delivery of
quality video services that demand a quality broadband infrastructure
will only further encourage the deployment of broadband networks into
yet unserved or underserved areas.

Although we believe that this transaction offers significant benefits to
consumers, we have reservations about some of the voluntary commitments
offered by the merger applicants. Like the review by the Department of
Justice, nineteen states, and three foreign countries, the order we
adopt today does not find there to be any public interest harms
resulting from the merger. Unlike the Department of Justice and these
other entities, however, we nevertheless impose a number of conditions
on the merging parties.

Some of the conditions will certainly provide additional consumer
benefits. We find the imposition of some of the conditions, however, to
be unnecessary. And, some of the conditions impose burdens that have
nothing to do with the transaction, are discriminatory, and run contrary
to Commission policy and precedent.

To be sure, we are pleased that some of these conditions should
accelerate the deployment of broadband facilities and adoption of
broadband service throughout the 22-state region of the merged company.
For example, the applicants have committed to offer high-speed broadband
services to all consumers in the combined territory by the end of 2007.
They have also committed to providing new retail broadband customers a
\$10 a month broadband Internet access service throughout the combined
region and they have committed to provide a stand-alone broadband
service -- one that doesn't require the purchase of other bundled
services -- at \$19.95 per month. While we would not impose these
requirements as regulations, we are pleased that these conditions will
further encourage the deployment and adoption of broadband by consumers.
As such, these are certainly consumer-friendly concessions and are
additional public benefits of the transaction.

Other conditions, however, are unnecessary and may actually deter
broadband infrastructure investment. The conditions regarding
net-neutrality have very little to do with the merger at hand and very
well may cause greater problems than the speculative problems they seek
to address. These conditions are simply not warranted by current market
conditions and may deter facilities investment. Accordingly, it gives us
pause to approve last-minute remedies to address the ill-defined problem
net neutrality proponents seek to resolve.

Importantly, however, while the Democrat Commissioners may have
extracted concessions from AT&T, they in no way bind future Commission
action. Specifically, a minority of Commissioners cannot alter
Commission precedent or bind future Commission decisions, policies,
actions, or rules. Thus, to the extent that AT&T has, as a business
matter, determined to take certain actions, they are allowed to do so.
There are certain conditions, however, that are not self-effectuating or
cannot be accomplished by AT&T alone. To the extent Commission action is
required to effectuate these conditions as a policy going forward, we
specifically do not support those aspects of the conditions and will
oppose such policies going forward.

For example, today's order does not mean that the Commision has adopted
an additional net neutrality principle. We continue to believe such a
requirement is not necessary and may impede infrastructure deployment.
Thus, although AT&T may make a voluntary business decision, it cannot
dictate or bind government policy. Nor does this order. Similarly, this
order does not bind the Commission to reregulate prices or reestablish
price controls. Specifically, with regard to special access condition
#6, AT&T is required to file an amended tariff which reduces its
wholesale special access prices for DS1, DS3, and Ethernet services to
some but not all companies. Unlike the commitment to offer broadband
services to consumers for \$19.95 a month, this condition provides no
consumer benefit and is aimed at large enterprise customers and some
competing carriers. And, AT&T will not be giving theses discounts to all
customers equally. Specifically, the merged entity will lower the prices
for some carriers but not for others. Carriers such as Verizon and Qwest
do not qualify for these discounted rates unless they also lower their
rates in their respective regions. In effect, therefore, the Democrat
Commissioners want to price regulate not only AT&T but also Verizon and
Qwest. Accordingly, not only are the conditions unnecessary as there is
no finding of public interest harm, but the conditions attempt to impose
requirements on companies that are not even parties to the merger. As
such, this condition imposes burdens on carriers that are not even
parties to the transaction. This condition surely imposes burdens that
have nothing to do with the transaction.

Moreover, unlike other voluntary business commitments, this condition
requires future Commission approval. Such approval would contravene
established Commission policy and precedent and we would object. In
short, we object to effectuating a change in Commission policy by a
voluntary commitment by one company.

First, the reimposition of rate regulation in the special access market
is inconsistent with the Commission's general policies of deregulating
prices in competitive markets.

Second, such a condition is explicitly inconsistent with Section 202(a)
of the Communications Act of 1934, as amended, that prevents
discrimination in, among other things, charges, practices, or services
and finds it unlawful to give any undue or unreasonable preferences or
advantages. *See* 47 U.S.C. § 202(a) (prohibiting unreasonable
discrimination in charges or services for like communication services
directly or indirectly); *Maislin Industries, U.S., Inc. v. Primary
Steel, Inc*., 497 U.S. 116, 130-31 (1990) (invalidating order allowing a
carrier to charge a tariffed, regulated rate to certain customers and
not others); *MCI v. CompTel*, 842 F. 2d. 1296, 1304 (1988) (stating
that the Commission is required by statute to ensure that special access
tariffs "conform to the dictates of section 202(a). If certain prices
are discriminatory, it is not enough to point to the fact that they were
computed in accordance with dissimilar methodologies. The FCC has no
choice but to see that the terms of section 202(a) are observed, even if
that entails some modification of the methodologies used to derive the
proposed charges."). Carriers that are denied the discounts would be
subject to a competitive disadvantage in the marketplace.

As such, even when AT&T attempts to fulfill its merger commitment by
filing its tariffs, the Commission is not bound to approve these
tariffs. Indeed, consistent with the Commission's prior policies and
precedent, we would oppose such discriminatory practices and would
encourage such tariffs to be rejected.

Finally, in addition to the fact that this condition appears aimed to
give certain competing carriers an advantage over others, we note that
there is no requirement that the benefits of the discounted special
access rates are passed through to customers.

AT&T's proposed commitments turn the clock backward to rate regulations
of a decade past. While the company has voluntarily agreed to these
conditions, the Commission is required by law to recognize competition
and will continue to use other tools and legal avenues to continue down
the deregulatory path envisioned by Congress and adopted by the
Commission.