Federal regulators failed to reach agreement Friday on whether to approve SBC Communications' takeover of AT&T, and Verizon Communications'...
WASHINGTON — Federal regulators failed to reach agreement Friday on whether to approve SBC Communications’ takeover of AT&T, and Verizon Communications’ purchase of MCI.
The Federal Communications Commission (FCC) met through the day but could not agree on what conditions, if any, should be attached to the multibillion-dollar deals.
The FCC had scheduled a Friday morning vote on the mergers but had to push back the meeting three times before it was postponed. Another meeting is set for Monday.
An FCC spokesman declined to comment on the reasons for the postponement.
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FCC Chairman Kevin Martin, who supports the mergers, has pressed for no conditions at all. He needs backing by at least one of the two Democratic commissioners on the four-member panel to get a majority.
Report of conditions
According to a source close to the matter, the Democrats are pressing for some conditions, such as caps on the prices Verizon and SBC charge competitors to lease high-capacity business lines.
They also want a guarantee that SBC and Verizon would sell their Internet access as a stand-alone service so customers aren’t forced to buy local phone service as well, said the source, who spoke only on the condition of anonymity because no agreement was reached.
The negotiations at the FCC came a day after the Justice Department gave its blessing to the acquisitions with limited conditions.
The requirements fall short of the asset sales in overlapping areas that SBC and Verizon rivals and consumer advocates had wanted to ensure healthy competition.
SBC’s acquisition of AT&T is valued at $16 billion; the Verizon-MCI deal is $8.5 billion.
Approval of deals
The FCC is the last federal hurdle for the two companies. Several state regulators still need to approve the deals.
The measures required by the Justice Department call for Verizon and SBC to lease to rivals high-capacity lines serving business customers in 19 metropolitan areas, including Washington, D.C., Boston, New York, Chicago, Detroit, Los Angeles and St. Louis.
Consumer advocates and Bell rivals wanted the mergers blocked or stronger conditions placed on them. Otherwise, they said, competition for the Bells that AT&T and MCI would have provided in many markets would be virtually eliminated.
Verizon and SBC said the mergers would pose no threat to competition.
The SBC merger won’t be the end of the road for the AT&T name. SBC, based in San Antonio, plans to change its corporate name to AT&T. New York-based Verizon will keep its corporate name after its merger with MCI.
AT&T and MCI dominate the market for business customers, and the mergers would enhance the base of business customers for regional Bell companies Verizon and SBC. The deals would also expand their national and international presence.