• E-mail
• Print
• Comment
• Font Size
• Digg
• del.icio.us
• Discuss article

California Regulators Approve $16 Billion Deal, Clearing Way for Historic Telephone Merger

Posted on: Tuesday, 22 November 2005, 06:00 CST

By The Associated Press

SBC Communications Inc. completed its purchase of former parent AT&T Corp. yesterday after California officials removed the final regulatory hurdle for the $16 billion deal.

The California Public Utility Commission also gave its consent to Verizon Communications Inc.'s planned purchase of Virginia-based MCI Inc. for about $7.5 billion, though that deal is still awaiting approval in other states.

The two deals highlight the fading distinction between local and long-distance calling as separate services, while ushering in an era dominated by direct competition with cable TV and wireless providers rather than among individual phone companies.

SBC, which already had said it was changing its name to AT&T Inc., announced yesterday that it also will be assuming AT&T's long- time stock trading symbol, "T," starting Dec. 1. The company also said it will unveil a new corporate logo on Monday.

The California commission's votes came nearly 10 months after AT&T agreed to be acquired by its former subsidiary and follows approvals by two federal agencies, 36 other states and 14 other countries. SBC originally predicted the entire regulatory process might take a year and a half.

The CPUC extracted concessions similar to those imposed on the companies by the Department of Justice and the Federal Communications Commission to make sure the deals don't hurt market competition.

The various regulatory agencies have won agreements from SBC and Verizon to stop requiring customers who want high-speed DSL Internet access to buy local phone service as well.

Before granting its approval, the FCC required that SBC and Verizon freeze for 30 months the wholesale prices they charge competitors to lease certain high-capacity business lines.

The companies also have promised not to hinder Internet access to consumers or the free flow of Internet traffic on their networks -- a topic that Congress is debating as part of a new bill governing the telecommunications industry.

SBC Chief Executive Edward Whitacre recently drew criticism by suggesting his company -- which is investing billions of dollars to upgrade its phone network for TV and advanced multimedia services -- has the right to charge Web-based providers of rival services to deliver their products to customers over SBC's lines.

San Antonio-based SBC, one of the regional "Baby Bells" created by the 1984 breakup of AT&T's national monopoly on local and long- distance phone service, announced last month that it would rename itself AT&T upon completion of the deal.

Before the deal closed, AT&T was to pay a special dividend of $1.30 per share to its 2.3 million stockholders under the terms of the agreement with SBC.

AT&T brings a national fiber-optic network and a valuable base of corporate accounts to SBC's largely regional, consumer-oriented business. AT&T also gives SBC the international capabilities needed to serve companies with far-flung operations.

The deal cements SBC's position as the first- or second-largest U.S. provider of traditional local and long-distance calling, as well as wireless and high-speed Internet services. The company owns a majority stake in Cingular Wireless in partnership with BellSouth Corp.

EFFECT ON STOCK TRADING

With SBC's purchase of AT&T, the new company will be called AT&T Inc. The effect of this on the stock tables:

*SBC will no longer appear in the listings.

*AT&T will continue to appear and will contain all of SBC's pricing and historical information.

The companies announced yesterday that on Dec. 1, the new ticker symbol will be AT&T's longtime "T."

Source: Richmond Times - Dispatch

More News in this Category