FOR IMMEDIATE RELEASE
October 24, 2006

FeatureGroup IP
1250 S. Capital of Texas Highway
Bldg. 2, Suite 235
Austin, Texas 78746
(713) 231-1007 (voice)
(877) 733-1492 (fax)
info@worldcall.net

Two recommended merger conditions can greatly benefit industry and taxpayers

Austin, TX – October 24, 2006 – FeatureGroup IP today filed comments with the FCC on the proposed merger between AT&T and BellSouth. In the filing, FeatureGroup IP proposes that the FCC impose two conditions on the merger which would significantly improve the competitive state of the telecommunications industry while saving the government and consumers billions of dollars.

One of FeatureGroup IP’s proposed merger conditions involves the universal service fund (USF). A laudable, though sometimes controversial program, USF levies taxes on all voice telecommunications companies and then re-distributes the collected funds to companies providing services to lower income and rural customers. FeatureGroup IP is proposing that the FCC require AT&T to abandon any USF revenues as a condition of merger approval. This would lead to an estimated direct savings of around $4 billion while simultaneously reducing taxation burdens on new, smaller voice services companies which are currently ineligible to actually provide services which would realize a return of some of those collected USF fees, thus ending a sort of perverse corporate welfare system.

FeatureGroup IP’s second proposed merger condition is the cessation of all lawsuits currently being brought by AT&T/BellSouth against enhanced service providers (ESPs). These lawsuits are nothing more than an attempt by AT&T/BellSouth to utilize their vast size and resources to thwart new technologies and business models which threaten current market share and profits. These new ESP competitors are vital to the continued competitive development of the telecommunications industry and should be protected from the single largest threat the proposed merger represents: the vast size and legal resources of the new entity. In short, the FCC cannot rely on “competition” from VoIP as a basis to approve the merger if AT&T is free to continue its unyielding barrage of litigation designed to stop, deter and control the very competitive activity it claims justifies the merger.

FeatureGroup IP believes that in its role as the primary regulator of the industry, the FCC has a responsibility to impose rules and conditions that will lead to a competitive landscape which benefits consumers. Two modest proposals can do much to accomplish those goals without imposing a heavy burden on the newly merged entity.  

FeatureGroup IP is a competitive local exchange provider (CLEC) that has pioneered a market approach combining world-class technology and regulatory expertise to offer services that allow IP-based communications providers to more easily and cost-effectively connect to the public switched telephone network (PSTN). For more information, contact Lowell Feldman at lowell@utex.net or (713) 231-2310.

The current UTEX agreement was achieved through an arbitration with SBC and in that arbitration, two major policy issues were resolved: Namely that (1) under the terms of our ICA UTEX has the right to be a wholesale provider of service and (2) the PUC awarded language that covered the bi-directional “Treatment of Internet Traffic” for wholesale rating and routing purposes. The parties then mutually agreed on express terms of our ICA that specifically states that neither party has the right to receive compensation from the other – whether in the form of access charges or reciprocal compensation – for traffic to or from Enhanced Service Providers. UTEX has relied upon that Arbitration award and incorporated the arbitrated definitions from the Arbitration into UTEX’s FCC approved tariff under which UTEX passes approximately 500,000 Internet calls per day in Texas with SBC.

About two months after my presentation on open VoIP issues at TEXALTEL, and after being questioned about UTEX’s business plans and success of such plans in an adversary hearing regarding a mutual bankrupt customer of SBC and UTEX, SBC began an internal SBC project it labeled “Access over Local” as an anticompetitive measure to stop and/or collect access fees from users of Voice Over Internet Technology. Under this SBC created project, SBC ignored current law, ignored our current ICA and our FCC approved tariff, forgot our prior resolution of this dispute, and proceeded to once again treat Internet Traffic from UTEX’s customers as some new and still undefined type of traffic under which UTEX, UTEX’s Internet Customers, and UTEX’s Internet Customers’ customers all individually and directly owe SBC access charges on a per minute basis for the traffic exchanged between UTEX and SBC that SBC unilaterally deems to be subject to access.