FCC gives SBC, Ameritech deal the go-ahead

The Federal Communications Commission on Wednesday approved the merger of SBC Communications Inc. and Ameritech Corp., based on what the commission called a set of 30 "significant, enforceable and unprecedented" conditions.

The merger, announced last May, calls for SBC Communications of San Antonio, Texas, to buy Chicago-based Ameritech for $62 billion.

The combination of SBC, the top provider of local phone service in eight Western and Southwestern states, and Ameritech, the dominant local carrier in five Midwestern states, will create a company with revenues of more than $45 billion and control of one-third of U.S. phone lines.

In imposing its conditions, the FCC said that it hoped to open local telephone markets in the respective companies' regions to competition while simultaneously requiring that the merged companies begin to offer competitive out-of-region services.

Threat of fines

Most significantly, the FCC mandated that the companies within 30 months begin to offer competitive out-of-region services in at least 30 markets or face a $1.2 billion fine.

The FCC will also require the merged company to offer advanced services through a separate subsidiary, open its operational and support systems, network interconnection points and unbundled network elements to competitors and provide reports on its responsiveness to both rivals and customers.

SBC and Ameritech also will be required to meet performance goals in the deployment of advanced broadband services, digital subscriber line services in particular, to ensure that the services are rolled out quickly and in a non-discriminatory fashion.

In response to yesterday's approval, SBC in a statement said that, "with the FCC's approval in hand, we will move as quickly as possible so that we can begin delivering the benefits of this merger right away."