FCC Scrutinizes Telecom Mergers
December 11, 1998
WASHINGTON - The Associated Press
: Two major telephone mergers are being
closely scrutinized by federal regulators
to determine whether
they'll be good for consumers. Although
regulators are asking tough questions,
they're still far from arriving at any answers.
The Federal Communications Commission is
looking at the planned mergers between Bell
Atlantic and GTE, and SBC Communications
and Ameritech, to determine whether they
serve the public interest, a broad legal
standard that can include any impact on
competition. The Justice Department also is
reviewing the proposed deals.
The FCC can approve the mergers, with or
without conditions, or block them altogether.
FCC officials said neither staff nor
commissioners are leaning one way or
another at this point, that all options are
under consideration and that a decision is
months away.
Three of the five FCC commissioners did raise
concerns about the mergers at an October
hearing, and the agency plans a second
hearing on the mergers Monday.
At the October hearing, FCC Chairman Bill
Kennard and commissioners Susan Ness and
Gloria Tristani _ wondered why the
companies need to merge to compete,
particularly for local phone customers.
Kennard declined to comment Wednesday.
SBC-Ameritech and Bell Atlantic-GTE
responded by saying they need the financial
muscle and efficiencies they would get from
combining to invade states outside their
current local phone territories and compete
against fellow Bell companies.
And, Tristani, in a speech last month, said
that while she has an open mind on the
mergers, ''In all candor, I'm a little skeptical
of the notion that a $25 billion company
needs to be bigger before it can successfully
compete out-of-region.''
Stephen Carter, SBC's president of strategic
markets, said the company on its own could
be a ''small niche player'' out of region,
serving only big businesses with few
services. But it needs to merge to be a
national player that can serve residential and
business customers with a broad range of
services. Doing this, he said, will take 8,000
people and $3 billion. ''We can't do national
unless we have the merger go through.''
The Wall Street Journal on Wednesday raised
the prospect that one or both of the deals
could be blocked.
''Are these mergers running into trouble at
the FCC? No, not at this time, I wouldn't say
that. I don't think we're that far along,''
Thomas Krattenmaker, one of the people
overseeing the agency's review of the
mergers, said in an interview Wednesday.
And Krattenmaker said he, personally, has
not made up his mind.
Other FCC officials agreed with
Krattenmaker's assessment, but also said
that doesn't mean the mergers couldn't hit
snags in the future. They spoke on condition
of anonymity.
Atlanta-based telecommunications analyst
Jeffrey Kagan said he doesn't see the FCC
just saying no. ''It will boil down to a simple
case of the FCC giving a laundry list of
demands and conditions for approval.''
The companies believe the mergers will be
approved. Executives from all four phone
companies say their mergers would boost
phone competition, accelerate new services,
such as high-speed Internet lines into
homes, and probably help lower the prices for
phone and other services.
[Copyright 1998, Associated Press |
