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Feds Approve SBC-A&T and Verizon-MCI Mergers, With Conditions

Posted by inet - 2005-10-28

Federal antitrust regulators on Thursday approved the multibillion-dollar mergers of SBC Communications Inc. with AT&T and of Verizon Communications Inc. with MCI Inc.

The Justice Department approved the deals without any significant conditions, such as the asset sales that critics said were needed to ensure adequate competition. The Federal Communications Commission still must sign off on the mergers, and that could come as early as Friday.

The SBC merger, valued at $16 billion, won't be the end of the AT&T name. SBC plans to change its corporate name to the iconic AT&T, company officials said Thursday. Verizon plans to keep its corporate name after the $8.5 billion merger with MCI.

Justice Department approval requires Verizon and SBC to lease to smaller competitors several hundred unused or ``dark'' lines that run to buildings serving mostly business customers. The leasing is required in 19 metropolitan areas where the companies, either SBC or Verizon, would be the only providers.

Without the condition, the mergers would have resulted in higher prices for certain customers in eight metropolitan areas in Verizon's territory and 11 metropolitan regions in SBC's area, the Justice Department said.

In addition to switching to the AT&T name, SBC also said it plans to adopt a new stock market ticker symbol and unveil a new corporate logo. It declined to say whether that meant it might adopt AT&T's distinctive longtime ``T'' ticker symbol, or incorporate the familiar AT&T globe in the new logo.

SBC and Verizon already are the largest regional phone companies, and AT&T and MCI dominate the market for business customers. The mergers would enhance the base of business customers for Verizon and SBC and expand their national and international presence.

Critics say the mergers will lead to fewer choices for consumers and higher prices, a claim SBC and Verizon dispute.

Jeff Kagan, an independent telecom analyst in Atlanta, said the mergers are indicative of an industry that is in the midst of massive change.

For the past 10 years, local phone companies have been engaged in a fierce battle with long-distance companies for customers, with the local carriers emerging largely victorious. Now, Kagan said, the merged phone giants will compete with cable companies _ as cable offers phone and Internet services and the telephone companies offer video and Internet services.

``It's not going to be separate sectors,'' he said. ``It's going to be single companies that sell all these services.''

Verizon and SBC are still awaiting approval from several states. SBC expects its merger to close by the end of the year; Verizon expects to close by late this year, or early next year.



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