Final federal agency set to approve telecom mergers

Two multibillion-dollar telecom mergers are expected to clear their final federal hurdle on Monday and be approved, with conditions, by the .

SBC Communications, which is buying AT&T, and Verizon, which is buying MCI, agreed to concessions aimed at promoting competition and preventing the companies from unfairly controlling Internet traffic, say people with direct knowledge of the matter.

The four FCC commissioners and the companies reached a deal Sunday after marathon negotiations. FCC Chairman Kevin Martin, a Republican, wanted the deals approved with no conditions but gave ground to win the vote of at least one of the commission's Democrats, Michael Copps and Jonathan Adelstein.

The FCC for months has been evenly split along partisan lines with a third Republican seat unfilled. The other commissioner is Republican Kathleen Abernathy.

The mergers, OK'd by the Justice Department last week after the companies agreed to modest divestitures, would let the USA's two biggest local phone companies absorb the two largest long-distance carriers.

Conditions imposed on the mergers:

• Require SBC and Verizon to offer their DSL broadband services without also forcing customers to use the companies' phone services. That would let consumers substitute an Internet-based phone service on the broadband line. The requirement would last two to three years. Today, SBC does not offer a stand-alone DSL service. Verizon does in much, but not all, of its territory.

• Freeze, for 2½ years, the wholesale prices that SBC and Verizon charge telecom rivals to lease their business lines. Competitors say the firms' prices have more than doubled the past five years.

• Prevent SBC and Verizon from blocking consumers' access to competing Internet-based phone services or websites. The FCC could fine SBC and Verizon for violations.

• Require SBC and Verizon to keep the arrangements AT&T and MCI have with other Internet backbone providers to exchange data traffic. Today, a handful of companies including AT&T, MCI and Level 3 Communications control the big nationwide lines that carry Internet traffic. They hand off traffic to each other for free. But rivals feared that SBC and Verizon could begin to demand payments from other backbone providers or refuse to accept their traffic.

The SBC-AT&T and Verizon-MCI mergers are expected to close by early next year.

Source:
yahoo.com/