Groups Oppose AT&T; Deal

The American Civil Liberties Union, a group of small telecommunications companies and Sprint Nextel Corp. have joined to oppose AT&T; Inc.’s bid to acquire BellSouth Corp.

In filings with the Federal Communications Commission, the ACLU said it wants the panel to hold up approval of the deal until the phone companies settle allegations that they had released customer information to the National Security Agency.

Sprint and the telecom group, meanwhile, are looking to squash the deal, with the group citing “irreparable harms to competition” from a combination.

Experts, however, still believe the deal will go through.

AT&T; dismissed the claims. “There is little overlap between the two companies and competition is well established in the markets where both companies now operate,” said spokesman Michael Coe. “There are always those who’ll try to use these proceedings to advance their own, narrow special interests.”

San Antonio-based AT&T;, which is the No. 1 phone service provider in the United States, would further cement its top position after acquiring Atlanta-based BellSouth, which is the No. 3 player and dominates the Southeast region, in the $67-billion deal. AT&T; would also take full control of Cingular Wireless, the largest wireless carrier by customer base.

Sprint argued that the combination would mean that it would be more dependent on AT&T; for connecting to its cellphone towers. “Sprint Nextel has no alternative to BellSouth or AT&T; for more than 99% of Sprint Nextel’s PCS cell sites in the BellSouth and AT&T; service areas,” the company said in its filing.

In a separate filing, the telecom group, led by XO Holdings Inc., said the merger creates only a larger monopoly with a greater ability to thwart competition between rival providers, as well as between AT&T; and BellSouth.

AT&T; is “quickly reassembling the old Bell system,” XO Communications spokeswoman Heather Gold said.

Other members in the group include Talk America Holdings Inc., Cbeyond Communications Inc. and privately held companies NuVox Communications Inc., Grande Communications Inc., Supra Telecom and Xspedius Communications.