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DOJ Approves Verizon-MCI, SBC-AT&T

The Department of Justice Thursday approved two telco mergers: Verizon-MCI and SBC-AT&T.

The deals are still subject to approval by the FCC, which may vote on both mergers at its meeting Friday, Oct. 28.
"We proved that the transaction is pro-competitive and will not lessen competition in any market,” said John Thorne, Verizon senior VP and deputy general counsel, pointing out the company had provided "millions" of documents in the eight-month vetting process.

"[Justice] found that regulatory barriers were coming down," Crowell & Moring partner William Randolph Smith, lead antitrust counsel for SBC, told B&C. "There was new competition and new technology coming in like VoIP and broadband wireless, and there were some real benefits to putting these two companies together."
DOJ did say it took into account competition from cable for voice and other services in approving the mergers.

Consumers Union, Consumer Federation of America, and the U.S. Public Interest Research Group had attempted to block the mergers, arguing the resulting companies would dominate the phone and Internet access businesses.

"Rubber-stamping these mergers is an embarrassing milestone in this nation because it puts an end to any real hope of head-to-head telephone competition," said Consumer's Union's Gene Kimmelman.But the Verizon-MCI telcom merger could also have a sizable impact on the TV space, given that Verizon has been the most agressive player in Telco video via its FiOS fiber-delivered TV/broadband service. SBC plans to roll out its Project Lightspeed video services in 2006.
The FCC is considering ways to make it easier for telcos to compete with cable and satellite in multichannel video distribution. It has already relieved telco Internet access providers of mandatory access provisions, as it did for cable modem service.

John Eggerton
John Eggerton

Contributing editor John Eggerton has been an editor and/or writer on media regulation, legislation and policy for over four decades, including covering the FCC, FTC, Congress, the major media trade associations, and the federal courts. In addition to Multichannel News and Broadcasting + Cable, his work has appeared in Radio World, TV Technology, TV Fax, This Week in Consumer Electronics, Variety and the Encyclopedia Britannica.