Antitrust & Competition Policy Blog

Editor: D. Daniel Sokol
University of Florida
Levin College of Law

Wednesday, May 4, 2005

What Has The Verizon-MCI Merger Wrought?

From today's Wall Street Journal (by staff reporters Shawn Young and Peter Grant):

"With Verizon Communications Corp. having sewn up the latest deal in a recent $100 billion spate of phone-company mergers, the lines are drawn for a showdown over who will offer households the most attractive packages of telecommunications services.

"Major cable companies have been racing to add phone service to the TV-and-Internet packages they already offer. Cablevision Systems Corp., the country's sixth-largest cable operator, has chalked up impressive results by offering a bundle of phone, TV and Internet services for $90 a month for the first year. Comcast Corp., the country's largest cable operator, is planning to offer a $69-a-month package of phone and high-speed Internet services.

"The phone companies are hitting back with offers of combined cellphone, Internet and landline phone service -- and the largest ones soon plan to add TV over new fiber-optic lines they are building. Verizon offers a package that charges $49.95 a month for unlimited local and long-distance calling and offers high-speed Internet service with it for $29.95 a month. The company also has a deal with satellite-TV provider DirecTV Group Inc.

"Not all consumers will benefit equally -- and some maybe not at all. Some consumer advocates say bundles will benefit consumers who already spend at least $50 to $60 a month on phone service and who have cellphones and high-speed Internet connections.

"Also, large parts of the country, especially rural areas, won't have the option of getting phone service from their cable provider for several years. "

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