FCC Decision Slows Down Broadband Access And AT&T MediaOne Deal
Today's decision by the Federal Communications Commission (FCC) relaxing cable television ownership rules allows AT&T (NYSE: T) to inch forward with a modified plan to purchase MediaOne and become the nation's largest US Cable Operator. But according to the Parsippany, New Jersey-based research and consulting firm, The Phillips Group-InfoTech, the ruling only gives the industry a slight nudge and not the big push it was expecting. The Phillips Group-InfoTech estimated the industry to expand by 300 percent over the next three years. ""The FCC decision opens the door for AT&T to negotiate the purchase of MediaOne but it did not resolve all the outstanding issues. This decision impedes the growth of Broadband,"" said Erv Paw, a research consultant at The Phillips Group-InfoTech. ""This decision will not move the industry toward total convergence between voice and data, and the cable, telephone and computer industries."" The ruling also reduces the advantage AT&T has over its competition. ""AT&T's holistic approach to broadband, which includes DSL, Cable and Wireless is unique and provided them a competitive advantage,"" said Paw. ""While not fatal, AT&T - and the entire industry - was banking on a more favorable decision."" A ruling more favorable to AT&T would have set the stage for greater competition among industry competitors and between entire industries,"" said Paw. ""We would have seen an all-out battle between equipment manufacturers such as Lucent Technologies (NYSE: LU), Nortel Networks (NYSE: NT) and Cisco Systems (Nasdaq: CSCO), providers like AT&T (NYSE: T), Sprint (NYSE: FON), MCI WorldCom (Nasdaq: WCOM), ILECs such as Bell Atlantic (NYSE: BEL), SBC Communications Inc. (NYSE: SBC) and BellSouth CORP (NYSE: BLS) as well as computer giant Microsoft (Nasdaq: MSFT) and cable leaders Time Warner (NYSE: TWX), and Cablevision Systems (Amex: CVC)."" The move by the FCC, however, did avert a potentially fatal blow to the industry. ""Had the FCC totally rejected the AT&T position, the growth of the industry would have been stymied,"" said Paw. ""Data from the Phillips study indicates that growth would be reduced by as much as 36 percent through a more stringent regulatory action."" Just this month The Phillips Group-InfoTech published a 193-page, 6-month study entitled, ""Broadband Local Access: Market Drivers and Probable Winners. The report is the most extensive primary research on local broadband access markets in the U.S. The study includes primary research including both face-to-face and telephone interviews with more than 250 points of contact within the leading industry players including carriers and public telephone operators (PTOs), cable operators and multiple service operators (MSOs), equipment and software vendors and regulators. About The Phillips Group The Phillips Group-InfoTech is a division of The Phillips Group with over 100 professionals at offices in Parsippany, New Jersey and in London, specializing in strategic solutions for corporate clients in the telecommunications and information technologies industries. The Phillips Group is a division of Phillips International Inc. of Potomac, MD. Phillips International has over 1,250 employees and annual revenues exceeding $350 million. Further information about The Phillips Group-InfoTech can be obtained at the company's Web site at http://www.thephillipsgroup.net. Source: Phillips Group-InfoTech Web site: http://www.thephillipsgroup.net