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 NEWS  Federal  Communications  Commission  445  12  th  Street,  S.  W.  Washington,  D.  C.  20554  This  is  an  unofficial  announcement  of  Commission  action.  Release  of  the  full  text  of  a  Commission  order  constitutes  official  action.  See  MCI  v.  FCC.  515  F  2d  385  (D.  C.  Circ  1974).  News  Media  Information  202  /  418-  0500  Internet:  http://  www.  fcc.  gov  TTY:  1-  888-  835-  5322 
 FOR  IMMEDIATE  RELEASE  NEWS  MEDIA  CONTACT:  October  31,  2005  Michelle  Carey  at  (202)  418-  1000 
 CHAIRMAN  KEVIN  J.  MARTIN  COMMENTS  ON  ADOPTION  OF  SBC/  AT&  T  AND  VERIZON/  MCI  MERGER  ORDERS 
 Today,  we  vote  to  approve  the  mergers  of  SBC  and  AT&  T  as  well  as  Verizon  and  MCI.  These  mergers  will  create  national  facilities-  based  providers  of  telecommunications  services  that  will 
 provide  new  and  advanced  services  to  both  mass  market  and  enterprise  customers.  As  end-  to-end  providers  of  communications  services,  these  companies  will  make  significant  investments  in 
 fiber-  optic  networks  and  use  these  networks  to  provide  customers  a  broad  array  of  voice,  data,  and  video  services. 


 I  believe  that  the  transactions  we  approve  today  are  consistent  with  and  will  further  many  of  the  Commission’s  competition,  broadband,  and  public  safety  priorities.  For  example,  these  mergers 
 create  strong  global  carriers  that  will  vigorously  compete  both  internationally  and  domestically.  Further,  the  complement  of  the  local  and  long  distance  network  facilities  will  permit  the  merged 
 entities  to  offer  a  more  diverse  array  of  services  to  a  broader  range  of  customers.  It  is  my  expectation  that  these  mergers  will  only  increase  the  incentive  and  ability  of  the  merged  entities 
 to  invest  in  broadband  infrastructure  and  spread  the  deployment  of  advanced  services  to  all  Americans.  Of  particular  importance  to  me,  the  mergers  will  further  the  goal  of  public  safety  by 
 virtue  of  the  commitments  that  have  been  made  with  regard  to  compliance  with  the  Commission’s  November  28  th  deadline  to  deploy  a  911  solution  for  VoIP  customers. 


 I  know  that  many  have  expressed  questions  about  these  mergers.  For  example,  some  are  concerned  that  these  transactions  will  adversely  affect  competing  providers  that  rely  on  the 
 merger  applicants  for  wholesale  inputs.  Others  have  been  concerned  about  the  effect  of  these  mergers  on  end  users  –  particularly  business  end  users  that  purchase  special  access  services.  I 
 believe  that  the  remedy  imposed  by  the  Department  of  Justice  should  adequately  address  any  concerns  in  this  regard.  Moreover,  I  note  that  under  the  commitments  made  by  the  Applicants, 
 UNE  rates  are  effectively  capped  for  two  years  and  special  access  prices  are  essentially  frozen  for  30  months  from  the  merger  closing  date. 


 Concerns  have  also  been  raised  about  the  impact  of  this  merger  on  the  Internet  backbone  market.  We  have  found  this  market,  which  has  never  been  regulated,  to  be  sufficiently  competitive.  It  is 
 the  Commission’s  prediction  that  these  mergers  will  in  no  way  alter  this  dynamic.  In  any  event,  the  Applicants  have  committed  to  publicly  post  their  peering  criteria  and  to  continue  settlements-free 
 peering  arrangements  with  the  same  number  of  providers  post-  merger  as  they  did,  in  combination,  pre-  merger. 
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 Let  me  say  that  I  do  not  believe  that  all  of  the  conditions  imposed  today  are  necessary.  I  believe  that  the  affected  markets  would  remain  vibrantly  competitive  absent  these  conditions. 
 Nevertheless,  the  parties  involved  have  chosen  to  make  these  commitments  now  in  order  to  obtain  the  certainty  of  immediate  Commission  approval  for  their  mergers.  I  understand  their 
 desire  to  move  forward,  and  agree  that  the  public  interest  will  be  well  served  by  providing  certainty  sooner  rather  than  later. 


 The  fiber  optic  networks  of  today  that  are  capable  of  delivering  over  100  mbps  worth  of  capacity  have  come  a  long  way  from  the  microwave  transmission  technology  that  was  first  used  to 
 compete  several  decades  ago.  We  are  seeing  both  intermodal  and  intramodal  providers  aggressively  competing  for  customers  using  a  multitude  of  new  technologies  and  platforms.  The 
 telecommunications  industry  is  a  constantly  evolving  one,  and  the  consummation  of  these  mergers  represents  the  opening  of  a  new  chapter  in  communications  history.  I  look  forward  to 
 the  promise  of  continued  technological  innovation. 
 Finally,  I  would  like  to  thank  my  colleagues  for  their  rigorous  review  of  these  transactions.  I  know  that  these  mergers  presented  difficult  issues  for  them  to  consider  and  I  appreciate,  as 
 always,  their  professionalism  and  willingness  to  always  do  what  it  is  in  the  public  interest. 
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