FCC OKs AT&T, BT deal
Telecommunications giants win final approval
for $10B joint venture
October 22, 1999: 7:39 p.m. ET
WASHINGTON (AP) - Federal regulators gave
final clearance Friday to a global joint venture
between AT&T and British Telecommunications
PLC, a deal that would combine the two
companies' international operations.
The new company would deal mostly with
voice and data service, mainly for large
commercial users. The venture originally was
valued at $10 billion.
The Federal Communications Commission
found the application for the alliance to be in the
public interest but imposed some limited
conditions on the deal.
FCC approval is the final step in the
regulatory process. The companies expect to
launch the global venture, called Concert, in
about a month.
"We are pleased the regulatory agencies
both in Europe and the U.S. agree that our
global joint venture will benefit customers as well
as the competitive telecommunications
marketplace,' said David Dorman, the venture's
chief executive officer.
The FCC conditioned its approval on the
companies compliance with an agreement
reached with them, the Defense Department, the
Justice Department and the Federal Bureau of
Investigation. The accord had to do with
potential national security and law enforcement
problems.
The agreement requires that domestic
telecommunications facilities owned by the
companies will be controlled by their subsidies
and located within the United States. This will
ensure that U.S. law enforcement authorities
have both the jurisdiction and the technical
ability to conduct electronic surveillance.
The companies agreed to take reasonable
measures to prevent improper use of domestic
telecommunications facilities and to adopt and
maintain policies to ensure electronic
surveillance orders and other legal
authorizations are kept confidential.
Also, the companies will require security
clearances for people with access to sensitive
network facilities and to keep access from
unauthorized people.
Under the FCC's other conditions, AT&T (T)
and their subsidiaries would be prohibited from
obtaining exclusive operating agreements with
British Telecom because of the joint venture.
The commission also required that BT comply
with British regulations that BT give its
competitors the same level of access BT has to
local customers for long-distance and
international calls.
The companies will use their combined
international networks to become a "carrier's
carrier' for long-distance services offered by
telephone companies operating in numerous
markets.
The companies, in announcing the deal in
July 1998, said the venture would operate in
three main areas:
A worldwide voice and data business
offering telephone networks to
multinational corporations and other big
institutions.
A global sales and service business that
initially will target corporate clients in the
financial, oil and information technology
businesses.
An international carrier services business
that will develop low-cost communications
links around the world for both individual
and business customers.
Combined, AT&T and BT carry about half
the calling traffic between the United
States and Britain but own less than 20
percent of the network capacity. |
