SBC, Ameritech Agree to FCC Conditions for Merger
SBC Communications Inc. and Ameritech Corp. reached a proposed agreement with the Federal Communications Commission staff members on conditions for approval of SBC’s acquisition of Ameritech.
SBC, the No. 2 U.S. local phone service provider, and Ameritech, the No. 5 local company, agreed to 26 conditions aimed at addressing FCC concerns about opening the companies’ markets to rivals, broad deployment of high-speed Internet services and other pro-consumer measures. SBC and Ameritech would be subject to fines of more than $2 billion if they fail to live up to the conditions.
“The [FCC] staff team has indicated they expect to recommend to the commission that the merger should be approved with the proposed conditions,” FCC Chairman William Kennard said. SBC expects to complete the purchase of Ameritech in August, said SBC general counsel Jim Ellis.
The conditions will be open to public comment, and FCC staff members expect to make a final recommendation to the five-person FCC no earlier than August. The FCC will then vote on whether to accept the staff’s recommendation.
SBC-Ameritech, controlling about a third of the local phone lines in the U.S., would be the largest U.S. local phone company with $46 billion in annual revenue.
SBC rose 69 cents to close at $54.50, and Ameritech was up $2.50 to close at $70 on the New York Stock Exchange.
In other telecommunications news, Britain’s Vodafone Group today will complete its $68.8-billion cash and stock purchase of San Francisco-based AirTouch Communications Inc., creating Vodafone AirTouch, the world’s largest wireless telecommunications company.
In New York Stock Exchange trading Tuesday, AirTouch became the most active issue, as the stock was dropped from the Standard & Poor’s 500 index and today will be dropped from the NYSE. AirTouch shares closed down $3.34 to $107.66, and Vodafone’s American depository receipts closed down $7.88 at $197.
Beginning today, the merged company’s shares will be traded on the London Stock Exchange and its ADRs will be traded on the NYSE under the symbol VOD.
