Groups say deal will drive up prices

NEW YORK -- Several of the nation's largest consumer groups said yesterday they would oppose AT&T's purchase of BellSouth Corp., arguing that the deal will reduce competition and drive up prices in the telecommunications industry.

Consumers Union and the Consumer Federation of America said they would urge the Justice Department to block AT&T Inc.'s $67 billion offer.

The consumer groups also asked their members to contact the Federal Communications Commission, which must approve the acquisition, and to petition their congressmen to try to prevent the deal from going through.

The consumer groups warned that increasing consolidation in the telephone industry would boost the prices for local, long-distance, and cellphone services.

They added that more-limited choices for phone service -- along with a similar merger trend in the cable industry -- threatened to reduce the variety of broadband Internet services available to consumers.

''If approved, this merger will lead to higher local, long-distance, and cellphone prices for consumers across the country," said Gene Kimmelman, a vice president of Consumers Union, which is headquartered in Yonkers, N.Y.

At the very least, Kimmelman said, federal regulators should ''require the merging companies to sell their Cingular wireless business to create more opportunities for competition between wireless and wireline services."

Mark Cooper, director of research for the Consumer Federation of America in Washington, D.C., said consumers should be worried that the promise of broadband Internet technologies is being compromised by consolidation in both the telephone and cable industries.