final OK for AT&T
Calif. panel also gives Verizon nod
By Bruce Meyerson
The Arizona Republic
Saturday, Nov. 19, 2005
NEW YORK - SBC Communications Inc. completed its purchase of
former parent AT&T Corp. on Friday after California
officials removed the final regulatory hurdle for the $16
The California Public Utility Commission also gave its
consent to Verizon Communications Inc.'s planned purchase of
MCI Inc. for about $7.5 billion, although that deal is still
awaiting approval in other states.
The two deals highlight the fading distinction between local
and long-distance calling as separate services, while
ushering in a new era dominated by direct competition with
cable TV and wireless providers rather than among individual
SBC, which had said it will change its name to AT&T,
announced Friday that it also will assume AT&T's longtime
stock-trading symbol, "T," starting Dec. 1. The company
will unveil a new corporate logo on Monday.
The California commission's votes came nearly 10 months
after AT&T agreed to be acquired by its former subsidiary
and follows approvals by two federal agencies, 36 other
states and 14 other countries. SBC originally predicted the
regulatory process might take almost a year and a half.
The California utility panel extracted concessions similar
to those imposed on the companies by the U.S. Department of
Justice and the Federal Communications Commission to make
sure the deals don't hurt market competition.
The various regulatory agencies have won agreements from SBC
and Verizon to stop requiring customers who want high-speed
DSL Internet access to buy local phone service as well.
Before granting its approval, the FCC required that SBC and
Verizon freeze for 30 months the wholesale prices they
charge competitors to lease certain high-capacity business
The companies also have promised not to hinder Internet
access to consumers or the free flow of Internet traffic on
their networks, a topic that Congress is debating as part of
a new bill governing the telecommunications industry.
SBC Chief Executive Edward Whitacre recently drew criticism
by suggesting that his company, which is investing billions
of dollars to upgrade its phone network for TV and advanced
multimedia services, has the right to charge Web-based
providers of rival services to deliver their products to
customers over SBC's lines.
Before the deal closes, AT&T will be paying a special
dividend of $1.30 a share to its 2.3 million stockholders
under the terms of the SBC deal.
San Antonio-based SBC is one of the regional "Baby Bells"
created by the 1984 breakup of AT&T's national monopoly on
local and long-distance phone service.
AT&T brings a national fiber-optic network and a valuable
base of corporate accounts to SBC's largely regional,
consumer-oriented business. AT&T also gives SBC the
international capabilities needed to serve companies with