October 27, 2005 1:59 PM PDT

DOJ approves telecom megamergers

The U.S. Department of Justice on Thursday gave its blessing for Verizon Communications to buy MCI and for SBC Communications to purchase AT&T.

After several months of reviewing the two cases, federal antitrust authorities approved the mergers with only minor stipulations. Verizon and MCI agreed to lease dark, or unused, fiber-optic connections to competitors in 356 buildings throughout Verizon's East Coast territory. SBC and AT&T also agreed to provide access to competitors in certain buildings within SBC's 13-state territory where AT&T has fiber and the two companies are the only providers with facilities serving those buildings.

The Verizon-MCI deal is expected to close later this year or early next year, after the Federal Communications Commission gives its expected approval. The FCC says it will vote on the Verizon-MCI combination on Friday. The companies already have received approvals from international regulatory bodies, as well as most state-level commissions.

The SBC-AT&T transaction will likely close by the end of this year. The companies have received approval from 33 of 36 states with clearance processes and from the District of Columbia. They are still awaiting approval from the FCC and regulatory officials in Arizona, California and Ohio.

SBC, the second largest local phone company in the United States, announced it was acquiring AT&T, the largest U.S. long-distance carrier, for $16 billion back in January. The companies said Thursday that they plan to use the AT&T name after the merger closes later this year.

Verizon, the largest local phone carrier in the United States, won a bidding war with Qwest Communications International earlier this year to buy MCI, the second largest long-distance phone company. The final deal was valued at $8.6 billion.

4 comments

Join the conversation!
Add your comment
Party like it's 1984
AT&T is back providing local phone service in much of the US. I'm so happy I can't wait for prices to climb through the roof.
Posted by sanenazok (3449 comments )
Reply Link Flag
Same As It Ever Was Almost
Let us review(for those that were not here before divestiture). In 1984, we had AT&T, controlling all the Bell Companies; GTE, controlling the Urban subdivisions of cities, and smaller independent companies, offering Rural service. Now, back then that was considered a monopoly to AT&T(who by the way, invented, and furnished free, all the equipment). So Our government, through the courts, forced all AT&T holdings to be sub-divided and sold off. This move resulted the loss of many great upper end carrers, which have never been replaced. Divestiture's largest influence was on the consumer, the loss of FREE equipment, cost and quality of service. The operative word is FREE. Ok, I know this is a very "Reader's Digest" version, but space IS limited.
Now, 11 years later, we have SBC(Southwestern Bell under AT&T) that has totally eliminated AT&T with a buyout; Verizon(formerly GTE), eliminating MCI, in the Urban position; Sprint/Nextel, taking over the Rural position; T-Mobile, owned by Deutsche Telekom; and various other small Celluar companies, fillimg in the independent position.
What has changed? Look at your phone bill. Mine has NEVER cost less, as divestiture promised in 1984, since the split. I have to buy my equipment, and repair my line myself(or hire someone). Who benefitted?
Posted by perfrog (10 comments )
Reply Link Flag
There goes some more competition
Thanks to the government!
Posted by bobby_brady (765 comments )
Reply Link Flag
What I would like to know is.....
What I would 'really' like to know is
WHAT THE DOJ (Department of 'justice') IS GETTING OUT OF THIS!!!
Posted by appletoys (23 comments )
Reply Link Flag
 

Join the conversation

Add your comment

The posting of advertisements, profanity, or personal attacks is prohibited. Click here to review our Terms of Use.

What's Hot

Discussions

Shared

RSS Feeds

Add headlines from CNET News to your homepage or feedreader.