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FCC OKs Ameritech-SBC Merger

October 6, 1999

WASHINGTON (AP) _ Federal regulators cleared the way today for a marriage between Ameritech Corp. and SBC Communications, a deal that would bring together two regional Bell companies to form the nation’s largest local phone company.

Approval by the Federal Communications Commission is the final step for the deal _ originally valued at $57 billion _ which already has been cleared by the Justice Department and state regulators. Through one of the largest mergers in U.S. history, now worth more than $70 billion, the combined business would control 57 million, or one-third, of the nation’s local phone lines spread across 13 states.

``It is the most momentous merger we have ever approved,″ said FCC Chairman Bill Kennard. ``The commission has never approved a more comprehensive set of conditions to further competition in local markets.″

This summer FCC staff recommended approval of the deal, based on a series of conditions proposed by the two parties. Under the terms, SBC-Ameritech would enter 30 new markets within 30 months to compete with established local phone companies. The combined business must provide deep discounts on key pieces of their networks to rivals who want to buy them.

The companies also would have to establish a separate subsidiary to provide advanced telecommunications services such as high-speed Internet access.

In order to ensure compliance, the conditions included stiff penalties. If they fail to meet the new market deadline, the companies could face a $40 million-a-market fine, up to a $1.2 billion cap.

The conditions ``are unprecedented in their detail, their clarity and their enforceability and the vigor with which they inject competition in these monopoly markets,″ Kennard said.

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