In a Sept. 14 filing with the FCC, a company called Broadwing [warning, high Flash content] said the following: 

We are concerned that the mergers of two significant Internet backbone providers (AT&T and MCI) with two of the largest providers of high-speed Internet access (SBC and Verizon) will result in two "mega peers" with the potential to de-peer competitors such as Broadwing and dominate the market.

Broadwing operates a fiber-optic network connecting U.S. cities, and offers services (VPNs, managed network services) to a variety of customers.  

Verizon responded on Sept. 21, saying that the "transaction will not give the combined Verizon/MCI market power in the Internet backbone business. The combined company will carry less than 10% of North American Internet traffic, it will rank fourth among seven comparable or larger backbone operators, and operators other than those seven will carry approximately 35 percent of Internet traffic."

What's the significance of a "mega peer"?  Wikipedia tells us that peering arrangements are private contractual arrangements that exist between peers that have "roughly balanced" traffic.  One peer doesn't charge another for carrying the other peer's traffic and handing it off to yet a third network.

What Broadwing is worried about is that extraordinarily large amounts of backbone will be controlled by two players, who will then decide to "de-peer" -- disconnect their networks -- from other networks whose favor or traffic they don't feel they need.  The result for Broadwing will be that life gets more expensive.  They'll have to pay the backbone provider -- just like small ISPs have to pay upstream providers -- to carry their traffic. 

In the words of the Wikipedia hive mind:  

De-peering usually results in degraded performance for customers as traffic is forced to take less optimal paths; in the worst case some parts of the internet can become unreachable to hosts on either side of the de-peered networks. This occurred in October 2005 when two backbone NSP's in the USA, Level 3 Communications and Cogent Communications, de-peered following a commercial determination by Level 3 that it was significantly larger and therefore Cogent should pay it to continue peering.

Another fear might be that sufficiently powerful backbone providers (especially those vertically integrated with major broadband providers) could just decide not to connect to the rest of the internet.  Verizon/MCI could decide to connect only to AT&T/SBC, and to create a gigantic (but limited) U.S. walled garden for their own proprietary services (no Skype; only approved video -- all the Barton-Dingell steps).

But this is absurd, isn't it? Wouldn't it be a terrible business decision for a backbone provider to cut off traffic?  Why would any ISP want to do business with a backbone that doesn't actually have arrangements that allow it to ensure the carriage of packets around the world?  Don't we have a flat world full of global transactions?

If email doesn't get where it's supposed to go, then people will find other ISPs and (indirectly) other backbone providers.

Laughable, right?  There will always be other ways to go to get on the backbone network.  If a "mega peer" tries to take advantage of its position to finally put a chokehold on the network of networks formerly known as the internet, people won't stand for it.  They'll find other ways to get their packets where they're going.  The thing about peering is that there are always other players to peer with.

Back me up here -- isn't there sufficient competition in the backbone market?  Won't it be impossible for any US "mega peer" to make our experience of "the internet" into a single huge walled garden?