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State Regulators Disconnect Ma Bell

The AT&T name will live on as SBC receives the final approval that was required to complete the $16-billion acquisition of its former parent.

November 19, 2005|From Associated Press

SBC Communications Inc. completed its purchase of former parent AT&T Corp. on Friday after California regulators removed the final hurdle for the $16-billion deal.

The California Public Utilities 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 television and wireless providers rather than among individual phone companies.

SBC, which previously said it was changing its name to AT&T, announced Friday that it also would be assuming AT&T's longtime stock-trading symbol -- "T" -- starting Dec. 1. Additionally, the company said it would unveil a new corporate logo Monday.

The Public Utilities 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 that the entire regulatory process might take almost a year and a half.

The PUC extracted concessions similar to those imposed on the companies by the U.S. Justice Department 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 lines.

The companies also have promised not to hinder Internet access to customers 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 Chairman and Chief Executive Edward E. Whitacre Jr. recently drew criticism by suggesting 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.

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