Sprint accuses AT&T of violating BellSouth acquisition condition

25 Mar 2008

Dow Jones reports that Sprint Nextel has accused rival telco AT&T of violating one of the conditions imposed on it following the purchase of BellSouth in 2006. The case represents the first time that AT&T has been accused of breaking one of the FCC-imposed conditions that it was forced to agree to in order to receive a green light for its takeover of BellSouth. Sprint Nextel’s interpretation of one of those conditions is that it can take any interconnection agreement it (or one of its subsidiaries) had with AT&T (or any of its operating units) and adopt it in any or all of the 22 states in which AT&T operates. Sprint Nextel is trying to take an agreement it had with BellSouth throughout the nine south eastern states it operated in, and extend it to all 22 states. AT&T meanwhile disagrees, saying that the merger condition was only intended to allow rival companies to cut down on the costs of negotiating new contracts in areas where business conditions are broadly similar. Some industry onlookers state that AT&T may try and drag the case out until 2010, at which date the conditions expire, and fresh interconnection agreements can be negotiated without the current limitations.