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Chamber Calls Telecom Merger Sign of New Reality

Tuesday, February 1, 2005 - 7:00pm

WASHINGTON, D.C. – The United States Chamber of Commerce said the merger announcement of SBC Communications and AT&T highlights the changed playing field in telecommunications and that updated government regulations must follow.

"The merger represents the business reality that technology has advanced much faster than the current rules can regulate," said William Kovacs, Chamber vice president for regulatory policy. "Rapid technology advancements have been accompanied by robust competition among companies that, just years ago, were not traditionally viewed as rivals."

The landscape of the telecom sector has shifted and government rules and regulations must now catch up, according to the Chamber. Because outmoded regulations have created uncertainty for investors, market capitalization in telecommunications between March 2000 and July 2004 plummeted 67 percent, according to a recent independent study commissioned by the Chamber. In dollar terms, market capitalization fell from $1.135 trillion to $375 billion.

"Reopening the 1996 Telecommunications Act and overhauling regulations would revitalize a sector of the economy that has been hit very hard," said Kovacs. "The proposed merger demonstrates an entirely new playing field that needs a new regulatory approach."

The SBC-AT&T merger will allow the combined company to provide consumers with some of the most advanced technologies – in Internet, telephony, wireless and video – and company statements indicate final action could come by early 2006. The Chamber expects the merger to be approved by regulators.

The U.S. Chamber of Commerce is the world's largest business federation representing more than three million businesses and organizations of every size, sector and region.

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