SBC, Ameritech accept merger condition

They agree to enter 30 local phone markets in next 2 1/2 years

June 30, 1999|By BLOOMBERG NEWS

WASHINGTON -- SBC Communications Inc. and Ameritech Corp. said yesterday that they had agreed to enter 30 local telephone markets in the next 2 1/2 years in return for regulatory approval of SBC's $78 billion purchase of Ameritech.

The proposal is one of 26 conditions that the staff of the Federal Communications Commission said should be met before the commission approves the merger. The plan is designed to increase local phone competition and access to high-speed Internet services for consumers.

SBC, the nation's second-largest local phone company, expects to complete the purchase of its smaller rival in August, said SBC general counsel Jim Ellis. SBC- Ameritech, with about one-third of U.S. local phone lines and $46 billion in annual revenue, would be subject to fines of more than $2 billion if it does not meet conditions imposed by the commission.

"The merger is now in the home stretch," said Ellis. Indiana and Illinois regulators are expected to rule on the merger next month, he said.

The companies are hurrying to provide competition that has been slow to materialize since the government deregulated the industry in 1996.

The conditions will be open to public comment, and FCC staff likely will make a final recommendation to the five-person FCC no earlier than the beginning of August. The FCC will then vote on whether to accept the staff's recommendation.

SBC's shares climbed 68.75 cents to $54.50 yesterday, and Ameritech's shares rose $2.50 to $70.

Pub Date: 6/30/99

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