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Thursday, March 9, 2006 - Page updated at 12:00 AM

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Editorial

See you inside the AT&T python

The $67 billion pythonic swallowing of BellSouth by AT&T is the latest evidence that the telecom industry is merging itself toward monopoly. Before we are all inside the snake, we might remember why we left it two decades ago.

It was not really that Ma Bell charged high prices, though on long distance it did. Mostly, it was that it was not service-oriented or much interested in anything new. A generation ago, the phone company would not allow you to plug in a phone. That began to change before the 1984 federal break-up of the Bell system, and after it, change accelerated.

The scene is different now, with DSL, satellite service, wireless and cable. We are reminded that there is competition, ferocious competition, which there wasn't in the days when Ma Bell's position was set by government franchise. AT&T is an able competitor; it offers DSL service at $12.99 a month, which it claims is the cheapest in the nation. Its acquisition of BellSouth will unite the ownership of Cingular, one of the most aggressive cellular systems.

It would also, however, take a large step toward what some are calling a duopoly, meaning two companies dominating a market. It means Pepsi versus Coke or, in this case, AT&T versus Verizon, which serves Snohomish and Skagit counties, having swallowed GTE. There are a few smaller ones, such as Qwest, which serves Seattle. There is speculation that Verizon will make a meal of Qwest, about which a Verizon spokesman says the company has no plans. Which guarantees nothing.

The cable companies, led by Comcast, provide the pipe for voice-over-Internet phone service. But by AT&T standards, the Comcasts and Vonages of the market are small, and those that don't own the pipe may be vulnerable to a squeeze from those that do.

Maybe duopoly will never come, or will work better this time. Certainly, the market feels much different than in the Ma Bell era. But history is not reassuring. Beyond a certain point, gigantism in industry becomes a disease.

The Justice Department and the Federal Communications Commission approved the last grand combination, SBC and AT&T, without much objection. We hold with Glenn Blackmon, regulatory director at the Washington Utilities and Transportation Commission, that regulators should hold this merger to a higher standard.

It is a big step. They should not be afraid to reject it.

Copyright © 2006 The Seattle Times Company

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