DOJ approves telecom megamergers

U.S. Department of Justice gives the green light on the Verizon-MCI merger and the SBC-AT&T transaction.

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.

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About the author

Marguerite Reardon has been a CNET News reporter since 2004, covering cell phone services, broadband, citywide Wi-Fi, the Net neutrality debate, as well as the ongoing consolidation of the phone companies. E-mail Maggie.

 

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