DoJ waves through AT&T-Bell South deal

It's alive! Ma Bell waits for FCC blessing

By Drew Cullen in San Francisco • Get more from this author

Posted in Telecoms, 11th October 2006 19:31 GMT

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The US Department of Justice has approved AT&T's proposed acquisition of Bell South, saying the enlarged group is "not likely to reduce competition substantially [or] harm consumer welfare". It has attached no conditions to the deal.

This leaves one more regulatory hurdle to jump - say-so from the Federal Communications Commission (FCC), which votes on the matter on Thursday.

In announcing its decision today, The DoJ's antitrust division notes the emergence of new technologies and competitors and also that BellSouth does very little business outside its heartland in the southeastern United States

But the $67bn all-stock acquisition goes a long way to re-assembling the old Ma Bell. In 1984, the US government broke up AT&T on monopoloy grounds. The company was split into a long distance arm - the legacy AT&T - and seven Baby Bells, regional carriers, known in today's jargon as incumbent local exchange carriers (ILECS).

Last year, SBC, the ILEC for the southwestern US, bought former parent AT&T for $16bn in cash and shares and then changed its name to AT&T. The AT&T-Bell South combo will control local phone calls in 23 states, as well as owning America's largest cellco, Cingular Wireless. ®

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