* Mergers still need approval from FCC, several states
The U.S. Department of Justice has approved SBC’s acquisition of AT&T and Verizon’s purchase of MCI.
As IDG New Service’s Grant Gross reports, the action by the Justice Depatment brings the two major telecom deals closer to completion. But the FCC still has to meet to address the two deals, and several states still need to approve the transactions.
The Justice Department will require the two merged telecom giants to divest some fiber-optic network facilities. The acquisitions, as originally proposed, would have caused higher prices for some business customers in eight metropolitan areas in Verizon’s territory and 11 metropolitan areas in SBC’s territory, the Justice Department said.
But the agency also seemed to reject arguments made by some other telecom carriers and consumer groups, which said the two mergers would drive up prices for most customers. The Justice Department’s investigation found that the acquisitions are “likely to generate substantial efficiencies that should benefit consumers,” the agency said.
The Justice Department complaint says Verizon and MCI are the only firms that control a direct wireline connection to hundreds of buildings in the metropolitan areas of Washington-Baltimore; Boston; New York; Philadelphia; Tampa, Fla.; Richmond, Va.; Providence, R.I.; and Portland, Maine. The merger would eliminate competition for facilities-based private-line service to those buildings.
Similarly, SBC and AT&T are the only firms that control a direct wireline connection to some buildings in the metropolitan areas of Chicago; Dallas-Fort Worth; Detroit; Hartford-New Haven, Conn.; Indianapolis; Kansas City, Mo.; Los Angeles; Milwaukee; San Diego; San Francisco-San Jose; and St. Louis.
