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SBC to address FCC concerns in talks

The Baby Bell will hold another round of negotiations with federal regulators who have expressed new concerns about the firm's pending merger with Ameritech.

SBC Communications said today it will open another round of negotiations with federal regulators who have expressed renewed concern about its pending merger with Ameritech.

Last week, Federal Communication Commission chairman William Kennard sent a letter to the heads of both companies, expressing "serious concerns" about whether the merger was in the "public interest."

Although the Department of Justice already has approved the merger with few conditions, Kennard said he wanted to discuss the possibility of new conditions that would address public interest concerns.

SBC representatives said they still aren't sure what Kennard may have up his sleeve, but the first round of talks will simply be aimed at fleshing out any concerns the commission may have.

"We're going to sit down with them and ask those questions," said Selim Bingol, a company spokesman. The company will not speculate on what kinds of conditions the regulators may impose, he added.

Some reports have noted that the FCC staff may consider pushing the companies to prove they have opened their local markets to competition before giving the green light to the merger. Staff confirmed as far back as December of last year that this could be a possible outcome of the FCC's approval process.

Bingol said the company does not expect that to happen, however. "We think those are distinct issues," he said.

Kennard may also find opposition to any strict merger conditions in his own commission and in Congress. Commissioner Harold Furchtgott-Roth has been a bitter opponent of tying competitive issues to public interest conditions on mergers in the past, and has been critical of Kennard's efforts on the SBC deal.

Some legislators also have criticized the FCC's lengthy review process for the pending Baby Bell mergers, and have already introduced a bill that would cap the amount of time the agency can use to review telecommunications deals.

In his letter last week, Kennard laid out a tentative timetable that would complete the new round of talks with SBC and Ameritech by late June.

SBC, in turn, has long been critical of the way the FCC has used its oversight powers granted by Congress in 1996, and has chafed at regulators' refusal to let it into long distance markets. But like its other regulated peers, the company has agreed to work with regulators whenever its own interests are at stake.

Earlier this week, Ameritech agreed to sell much of its cellular phone business to GTE, largely in order to satisfy the Justice Department's antitrust conditions. This will leave SBC and Ameritech without any overlapping service areas for their wireless phone operations.