6. Other Issues
A. Does the Proposed Merger of the Parent Companies and Change in Control Create Environmental Issues of Concern?
The applicants state "there is no possibility that the transaction contemplated herein may have a significant effect on the environment."69 The applicants argue that the application involves only a proposed change in the underlying ownership of facilities, not a change in the facilities themselves.
No party raised any environmental issues concerning the proposed financial transaction.
Pursuant to state law and Commission precedents we find this application raises no environmental issues of concern.
B. Does the Proposed Merger of the Parent Companies and Change in Control Create Anti-Trust Issues of Concern?
1. Position of Parties
The applicants state that "the facts here also compel the conclusion that there are no antitrust . . . concerns with the AT&T Broadband Phone and CBC Applications for change of control."70 The applicants note that "CBC does not now hold a certificate of public convenience and necessity to provide local exchange service and it does not now actively market toll service in California."71 In addition, the number of cable local exchange customers - which total about 145,000 - are insignificant for antitrust purposes in a California market with millions of local customers. Further, AT&T Broadband Phone and CBC "would provide service over their respective affiliates' non-contiguous cable properties."72 Thus, the merger does not eliminate a competitor from any market. In addition, the applicants note that they cannot "preclude an other competitor from providing local service."73
Qwest argues that the "proposed transfer of control of AT&T Broadband Phone of California, LLC (AT&T Broadband Phone) and Comcast Business Communications, Inc. to AT&T Comcast will adversely impact Qwest by further limiting its access to cable network facilities and therefore its ability to provide telephone and high speed internet access services to California consumers."74 Qwest asks that the Commission mitigate this adverse impact by requiring the applicants to provide "equal access (footnote omitted) to their cable facilities to telephone service providers (footnote omitted)."75 In addition, Qwest argues that there is "an inadequate record to determine if the proposed transaction raises anticompetitive concerns, or has an adverse impact on competition, by expanding AT&T's monopoly over cable telephony services."76
TURN-CFA call for the Commission to "analyze whether the increased scope and scale created by this merger will allow the Applicants and their affiliated companies to be even more aggressive in its pricing of telephony and cable modem service, thereby eliminating the opportunity for others to compete."77 On the other hand, in its same protest, TURN-CFA raise the spector that the merged entities will lack interest in local telephony, and that the companies "will not compete with each other. . ."78 Finally, CFA asks in its Reply to the Joint Supplement that Commission scrutinize whether the new company remains committed to cable telephony, noting that the high margins in cable operations "cannot be obtained in cable telephony."79 CFA concludes that discovery pertaining to business plans is needed.
2. Discussion: Merger of Parents Raises no
Anti-Trust Issues
The proposed merger of the parent companies of AT&T Broadband Telephone and CBC raises no anti-trust issues. The relevant market to examine anti-trust issues is local exchange telecommunications services. CBC does not provide these service; AT&T Broadband Telephone has a small market share. Thus, there are no present anti-trust issues.
Since the CBC and AT&T Broadband Telephone networks fail to overlap, there are also no likely future anti-trust issues.
The filings of TURN-CFA indicate that they are concerned about this financial transaction, but their concerns embrace mutually exclusive outcomes - is it too much competition or not enough competition? Is the proper concern over anti-competitive cross subsidy or the failure to enter a non-lucrative telephony market? These protests raise worries, not an issue that requires further investigation.
Finally, since no anti-trust issues arise from this merger, we need not consider mitigation measures proposed by the Qwest. In particular, Qwest's request that the Commission order equal access to the applicants' cable networks makes little sense as a condition of a merger. Indeed, such a change of policy, if appropriate, should apply not to one company, but to all carriers. As a consequence, this is not the proper venue for considering this request.
69 Joint Supplement, p. 17. 70 Joint Supplement, p. 15 71 Ibid., p. 16. 72 Ibid. 73 Ibid. 74 Qwest, Protest, p. 2. 75 Ibid., p. 3. 76 Qwest, Response to Joint Supplement, p. 4. 77 TURN-CFA, Protest, p. 8. 78 Ibid., p. 6. 79 CFA, Reply to the Joint Supplement, August 23, 2002, p. 4.
