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SBC, Ameritech clear hurdle
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February 23, 1999: 1:51 p.m. ET
Deal with Ohio regulators, consumers is key step in multibillion dollar merger
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NEW YORK (CNNfn) - SBC Communications Inc. and Ameritech Corp. cleared an important hurdle on their merger track Tuesday after Ohio regulators and a group of consumer advocates inked a settlement with the regional phone giants.
In the agreement, which SBC said took more than 100 hours to craft, will require the regional Bell companies to freeze phone rates for residential customers for 3 years and guarantee job levels in Ohio for 2 years.
The companies also pledged to provide multimillion-dollar customer credits and payments if service quality standards aren't met.
While several competitors agreed not to oppose the deal, long-distance giant AT&T Corp. quickly announced its opposition.
Striking the deal with San Antonio-based SBC and Ameritech, the biggest local telephone service provider in Ohio, were the staff of the state's Public Utilities Commission and several consumer groups.
The full commission is expected to vote on the deal within 30 days and approval seems likely with its staff on board.
Competitors including CoreComm and Time Warner Telecom have agreed not to try and block the deal. Time Warner Inc. is the parent company of CNN.
"The settlement reflects that we are strongly committed to growth, to service quality and to facilities-based competition," Richard Notebaert, chairman and chief executive officer of Ameritech, said.
Notebaert added: "These parties have correctly balanced the needs of customers, employees and competitors to reach a fair settlement."
AT&T, the nation's leading long-distance company, said, however, the deal won't provide fair competition.
"The proposed settlement does not and cannot eliminate the Ameritech-controlled entry barriers that have kept competitors out of the Ohio local exchange market for the last three years," AT&T spokesman Ray O'Connell said.
"The merger of SBC and Ameritech will only increase Ameritech's ability and incentive to keep its monopoly grip over the Ohio local phone market," he added.
The SBC-Ameritech merger, first announced last May as a $62 billion deal, is expected to be completed by the middle of 1999.
The companies still face regulatory hurdles in Illinois, the home state of Chicago-based Ameritech, and approval by the Department of Justice and the Federal Communications Commission.
Shares of the widely held companies dipped on the New York Stock Exchange in the early afternoon. Ameritech (AIT) lost 1-9/16 to 64-11/16 and SBC (SBC) fell 1-9/16 to 53.
Dow issue AT&T (T) was off 9/16 to 86. 
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