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Feds Approve Telecom Mergers, But With Conditions Oct. 28, 2005

Posted by iNext - 2005-10-30

Federal antitrust regulators on Thursday approved two multibillion-dollar telecommunications mergers: SBC Communications Inc. and AT&T, and Verizon Communications Inc. and MCI Inc.

The Justice Department attached some conditions to the mergers, requiring Verizon and SBC to divest some local fiber-optic network facilities in 19 metropolitan areas.

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 areas in SBC's area, the Justice Department said in announcing approval.

The Federal Communications Commission still must sign off on the deals. The agency is scheduled to vote on the mergers Friday at its monthly public meeting, though the decision could slip to next week.

The storied AT&T name will live on after the $16 billion merger. SBC announced Thursday it is renaming itself and most of its products under the 120-year-old brand.

SBC also said it plans to adopt a new stock market ticker symbol and unveil a new corporate logo. However, it declined to say whether that meant it might adopt AT&T's distinctive long-time "T" ticker symbol, or incorporate the familiar AT&T globe in the new logo.

"This is the brand that will lead the industry in delivering the next generation of communications and entertainment services," SBC Chief Executive Edward E. Whitacre Jr. said in a statement, referring to the company's bid to upgrade its telephone network for cable TV and new multimedia services.

The name change will not affect Cingular Wireless LLC, a joint venture between SBC and BellSouth Corp. that became the nation's largest cell phone provider about a year ago with the $41 billion purchase of AT&T Wireless, a former AT&T subsidiary.

Verizon plans to keep its corporate name after the $8.5 billion merger with MCI.

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 both SBC and Verizon dispute.

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