FCC Approves PacTel, SBC Merger

The government has cleared the way for Pacific Telesis Group and SBC Communications Inc. to merge, the first big local phone companies that have received such permission. In taking the action, the Federal Communications Commission rejected arguments by long-distance companies AT&T; Corp., MCI Communications Corp. and others that the combination would harm competition. The FCC said the $16.7-billion deal--combining two of the seven regional Bell operating companies that were spun off in the 1984 breakup of AT&T--would; serve the public interest. The Justice Department had cleared the deal in November. The merger still needs to be approved by California regulators. PacTel operates in California and Nevada; SBC’s customers are in Arkansas, Kansas, Missouri, Oklahoma and Texas.