WASHINGTON — A federal judge Wednesday approved Pacific Telesis' plans to acquire Communications Industries, a Dallas-based paging and cellular mobile telephone company.
U.S. District Judge Harold Greene's ruling enables Pacific Telesis to bring its paging services and Costa Mesa-based cellular mobile phone operations outside its service area.
"We're very excited," said Sam Ginn, president of diversified businesses for Pacific Telesis. "What we see emerging is a whole industry where people on the move need to communicate. What this action does is put us in the forefront of serving the emerging market that we believe is a very high-growth area."
San Francisco-based Pacific Telesis, the parent of Pacific Bell, is one of the seven regional companies that were formed by the breakup of AT&T.
Last May, Pacific Telesis agreed to pay $432 million for Communications Industries. By selling some of Communications' subsidiaries and adding the proceeds from the sale to cash the Dallas company now has on hand, the actual cost of the acquisition will be reduced to $282 million, Pacific officials said.
The acquisition was supported by the Justice Department, which maintains that the regional companies should be allowed to compete in businesses outside their designated geographic regions. The department said that a regional company has no monopoly advantage in areas where it does not control the local telephone system.
Opponents of the acquisition, MCI Communications and McCaw Cellular Communications, argued that the regional companies would use their vast monopoly power to control--and perhaps stifle--development of cellular communications.
Greene, who has presided over the court-supervised divestiture of AT&T, also expressed concern at a hearing earlier this month that regional companies such as Pacific Telesis may use revenue supplied by local telephone customers to finance expansion into new businesses. But in his decision Wednesday, Greene said that the decree under which AT&T was split up gave him no power to block the acquisition.
The California Public Utilities Commission is scheduled to meet Friday to give its approval to the acquisition. The last hurdle for Pacific Telesis will be a San Jose court ruling on a request from McCaw for a preliminary injunction halting the takeover.
If that court rules for Pacific Telesis, Ginn said, the merger could take place as early as Friday.