AT&T merged with BellSouth in 2006 in an $86 billion deal that gave the company customers in 22 states. It stuck a deal with the Federal Communications Commission to extend broadband to "all residents in its combined territory," with at least 30 percent of wired Internet deployment, or DSL, in rural or low-income communities, Smith reports. AT&T says it has met those obligations, but it refused to tell Smith where services were extended. Advocacy groups say the FCC doesn't hold companies accountable for defaulting on their extended-broadband promises, but an agency spokesman told Smith the FCC "has and will continue to take action to enforce these merger commitments," and that the FCC believed AT&T had followed through based on a letter the company sent to the agency.
The FCC depends on companies to self-report compliance with merger conditions, and doesn't conduct its own audits. Some former FCC commissioners and industry experts say merger conditions often have loopholes that allow companies to comply without fully extending broadband to rural areas.
"AT&T committed to provide Internet service at minimum speeds that were hardly faster than dial-up . . . while pledging to deliver 'alternative technologies,' including satellite Internet, through as much as 15 percent of its territory," Smith reports. "At the time, satellite Internet was already available through nearly all of BellSouth’s turf, making AT&T’s commitment 'utterly meaningless,' said Dave Burstein, editor of the telecom industry publication DSL Prime." (Read more)