By Paul Davidson and Leslie Cauley, USA TODAY
Two big mergers that will reshape the telecom industry appear set to clear major hurdles as early as this week.
SBC Communications tentatively has agreed to a key concession to win antitrust approval for its purchase of AT&T, and Verizon has done the same for its merger with MCI, people with direct knowledge of the situation said.
Under the proposed deals, SBC and Verizon each would lease to smaller competitors several hundred lines to business customers, these people say. Details are still being finalized. The Justice Department, which could not be reached for comment, may announce the concessions and its approval of the deals this week.
Separately, the Federal Communications Commission, which also must approve the mergers, could do so at a meeting Friday. FCC Chairman Kevin Martin has recommended clearing the deals with no conditions. But Martin might have to agree to some requirements to encourage competition to win the votes of at least one of the two Democratic commissioners. The FCC is split along party lines. A third GOP seat remains unfilled.
In the business market, the Bells control about 95% of the fiber-optic lines serving large customers. But in recent years, AT&T and MCI have started running their own fiber to businesses in large cities. AT&T and MCI each serve about 2,000 buildings in SBC's and Verizon's regions. SBC and Verizon also serve those buildings. Regulators worry that the mergers will hurt competition by putting both sets of lines in a building under one company's control.
They considered forcing the companies to sell their duplicate wires to rivals, but that was deemed too disruptive to existing customers. Instead, the tentative deals would require SBC and Verizon to lease to rivals, on a long-term basis, their spare, or "dark," fiber that runs to several hundred of the buildings, say people with knowledge of the situation.
Not all of the buildings would be affected, because SBC and Verizon argued that many are already served, or easily could be, by competitors with existing lines in the neighborhood. Justice and the companies are still haggling over how many buildings to include in the pacts, say the people with knowledge of the situation.
At least one competitor has little interest in acquiring those lines, because SBC and Verizon would not be forced to also transfer the customers. "All I've got is an expense and no revenue," says Heather Gold of XO Communications.
http://www.usatoday.com/tech/news/techpolicy/business/2005-10-23-mergers-likely_x.htm
Two big mergers that will reshape the telecom industry appear set to clear major hurdles as early as this week.
SBC Communications tentatively has agreed to a key concession to win antitrust approval for its purchase of AT&T, and Verizon has done the same for its merger with MCI, people with direct knowledge of the situation said.
Under the proposed deals, SBC and Verizon each would lease to smaller competitors several hundred lines to business customers, these people say. Details are still being finalized. The Justice Department, which could not be reached for comment, may announce the concessions and its approval of the deals this week.
Separately, the Federal Communications Commission, which also must approve the mergers, could do so at a meeting Friday. FCC Chairman Kevin Martin has recommended clearing the deals with no conditions. But Martin might have to agree to some requirements to encourage competition to win the votes of at least one of the two Democratic commissioners. The FCC is split along party lines. A third GOP seat remains unfilled.
In the business market, the Bells control about 95% of the fiber-optic lines serving large customers. But in recent years, AT&T and MCI have started running their own fiber to businesses in large cities. AT&T and MCI each serve about 2,000 buildings in SBC's and Verizon's regions. SBC and Verizon also serve those buildings. Regulators worry that the mergers will hurt competition by putting both sets of lines in a building under one company's control.
They considered forcing the companies to sell their duplicate wires to rivals, but that was deemed too disruptive to existing customers. Instead, the tentative deals would require SBC and Verizon to lease to rivals, on a long-term basis, their spare, or "dark," fiber that runs to several hundred of the buildings, say people with knowledge of the situation.
Not all of the buildings would be affected, because SBC and Verizon argued that many are already served, or easily could be, by competitors with existing lines in the neighborhood. Justice and the companies are still haggling over how many buildings to include in the pacts, say the people with knowledge of the situation.
At least one competitor has little interest in acquiring those lines, because SBC and Verizon would not be forced to also transfer the customers. "All I've got is an expense and no revenue," says Heather Gold of XO Communications.
http://www.usatoday.com/tech/news/techpolicy/business/2005-10-23-mergers-likely_x.htm
