California regulators today approved the $8.4 billion merger of Verizon Communications Inc. and MCI Inc., and the $16 billion takeover of AT&T Corp. by SBC Communications Inc., but not without imposing some conditions.
The consent was the last in a series of required steps for the mergers to go through, and SBC said the approval marked the immediate launch of the new AT&T.
The California Public Utilities Commission imposed more than $100 million in commitments by the combined companies as conditions for approval. Verizon-MCI and SBC-AT&T agreed to increase access to broadband and advanced telecommunications services to underserved communities in the state.
The PUC also froze current wholesale rates on SBCs special access lines for a year, similar to the FCCs conditions for merger approval. The commission further is requiring SBC and Verizon to provide standalone DSL a clause the FCC stipulated, as well and to increase corporate philanthropy by a combined $67 million over five years, and to focus those contributions on low-income and underserved communities. Finally, the PUC is requiring both companies to contribute a combined total of $60 million to an infrastructure fund for emerging broadband technologies.
Verizon and MCI executives say they now expect to close their transaction in December or early January. SBC says Monday, Nov. 21 will be the companys first full day of operations as the new AT&T; executives on Monday will unveil the companys new ticker symbol and corporate logo.
Earl Comstock, president and CEO of COMPTEL, an association representing CLECs that has opposed the megamergers, said the SBC-AT&T combination marks a profoundly new chapter for the telecommunications industry. COMPTEL is hopeful that SBC adopts more than just AT&Ts name but its pre-merger support and advocacy for a robust, competitive communications marketplace and open networks. Should the new company choose instead to go down a monopolistic path, history will repeat itself and the U.S. Justice Department will have to once again break up AT&T to ensure consumers continue to benefit from technological innovation and choice.
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