The Federal Communications Commission has approved two mergers involving four of the nations largest telecommunications firms. By a 4-0 vote, commissioners cleared the way for SBC Communications to take over AT&T and Verizon to acquire MCI.
Among the conditions placed on the deals, the combined companies will be required to offer their high-speed Internet access as a stand-alone service, so customers arent required to buy local phone service in order to get Internet service.
Consumer advocates said the conditions dont go far enough. The Consumer Federation of America has called the deals harmful to consumers.
SBC, which is renaming itself with the better-known AT&T brand, hailed the FCC action, saying it marks a "major milestone." With the action, the FCC joins 33 states and the District of Columbia in clearing the merger. Reviews are still pending in Arizona, California and Ohio.
The Verizon-MCI deal also faces review in a handful of states, but the company said the FCC approval adds momentum for clearing the deal. Executives for both MCI and Verizon said they believe they can close by the middle of February.
"After two federal reviews and strong approvals by shareholders and the international community, it is clear that this combination is undeniably in the public interest," said Tom Tauke, Verizon executive vice president of public affairs, policy and communications.
"The Department of Justice and FCC approvals put us on firm footing as we seek the remaining few state approvals."
To win approval the companies pledged not to hinder Internet access to consumers or the free flow of Internet traffic on their networks. They also promised to allow customers access to rivals' Web sites and competing offerings like Internet phone service.
The federal regulators required that SBC and Verizon freeze the wholesale prices they charge competitors to lease certain high-capacity business lines for at least 30 months.
With the acquisition of AT&T, SBC Communications is now valued at $16 billion; Verizon and MCI are worth about half that.
