January 12, 2007

Exclusive to the Wireless Messaging Newsletter

By Vic Jackson, Interconnection Services, Inc.

As most of you are probably aware, the FCC approved the AT&T/BellSouth Merger on Friday December 29, 2006. This transaction, which created the largest telephone utility in the USA since the breakup of the old AT&T system in 1983, has considerable significance for any paging carrier doing business in any of the 22 BellSouth or AT&T (formerly SBC) operating states. There was some substantial pressure to accomplish the merger prior to the end of 2006 for various business reasons including taxes considerations, but two of the Commissioners initially balked at approving the agreement and one Commissioner refused to participate in the approval process because of prior work with an association that was an objector to the merger. As part of the negotiation process with the FCC, AT&T agreed to some merger commitments and made some significant concessions of its prior positions on various subjects including Internet neutrality, Unbundled Network Elements (UNE’s), broadband deployment and interconnection agreements.

Of most significance to paging carriers, on page three of the Merger Commitments document, ATT agreed to allow adoption of any existing AT&T or BellSouth interconnection agreement by any telecommunications carrier, in all AT&T and BellSouth operating states.

With respect to AT&T, I am aware of at least three existing agreements between AT&T and paging carriers that provide for delivery of all ATT traffic to the paging carrier POI without charge of any kind to the paging carrier. It therefore seems reasonable that AT&T must now allow adoption of any one of these existing no-cost paging carrier agreements by any paging carrier in the AT&T/BellSouth states. Considering that AT&T has required payment for interconnection facilities that carry so-called "transit" traffic and inter-MTA traffic in most of their existing paging carrier agreements, a request to adopt one of the no-cost agreements could save a paging carrier whatever they are paying now for these LEC facilities. All paging carriers would do well to review their existing interconnection agreements in light of the AT&T/BellSouth Merger commitments.

The AT&T/BellSouth Merger was approved and effective on Friday December 29, 2006 as Docket No. 06-74. The Appendix to the FCC approval document includes the following Commitments on page 3. (The entire Merger document is available on the FCC website.)

"Reducing Transaction Costs Associated with Interconnection Agreements

1 . The AT&T/BellSouth ILECs-shall make available to any requesting telecommunications carrier any entire effective interconnection agreement, whether negotiated or arbitrated, that an AT&T/BellSouth ILEC entered into in any state in the AT&T/BellSouth 22-state ILEC operating territory, subject to state-specific pricing and performance plans and technical feasibility, and provided, further, that an AT&T/BellSouth ILEC shall not be obligated to provide pursuant to this commitment any interconnection arrangement or UNE unless it is feasible to provide, given the technical, network, and OSS attributes and limitations in, and is consistent with the laws and regulatory requirements of, the state for which the request is made.

2. The AT&T/BellSouth ILECs shall not refuse a request by a telecommunications carrier to opt into an agreement on the ground that the agreement has not been amended to reflect changes of law, provided the requesting telecommunications carrier agrees to negotiate in good faith an amendment regarding such change of law immediately after it has opted into the agreement.

3. The AT&T/BellSouth ILECs shall allow a requesting telecommunications carrier to use its pre-existing interconnection agreement as the starting point for negotiating a new agreement.

4. The AT&T/BellSouth ILECs shall permit a requesting telecommunications carrier to

extend its current interconnection agreement, regardless of whether its initial term has expired, for a period of up to three years, subject to amendment to reflect prior and future changes of law. During this period, the interconnection agreement may be terminated only via the carrier’s request unless terminated pursuant to the agreement's "default" provisions."