US telco mergers get FCC rubber stamp

Time to move on

Two mega mergers in the US telecoms sector got the green light yesterday after the Federal Communications Commission (FCC) said it was satisfied the deals offered "significant benefits" to punters.

The approval means that SBC can go ahead with its $16bn merger with AT&T while Verizon can finally swallow MCI as part of an $8.5bn deal.

In its ruling published yesterday the FCC said that customers would "reap the rewards of the public interest benefits that will flow from these mergers" including the "integration of complementary networks" that would "increase efficiency and provide consumers with new services and improved network performance and reliability".

It went on: "The mergers will create stable, reliable US-owned companies that will provide improved service to government customers and benefit national defense and homeland security."

As well as being in the national interest, the money saved by the pairings should also see more cash ploughed into R&D.

FCC chairman Kevin Martin acknowledged that concerns had been raised by the mergers of these communications giants including what effect this might have on competition both for rivals and end users.

But he concluded that enough measures were in place to ensure that the mergers would not succeed at the expense of competition.

"I know that many have expressed questions about these mergers...[but] I believe that the remedy imposed by the Department of Justice should adequately address any concerns in this regard," he said. ®

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