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FCC dubious of SBC deal
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May 6, 1999: 1:32 p.m. ET
Staff wants open market guarantees as Ameritech merger condition
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WASHINGTON (CNNfn) - Federal Communications Commission staff members have tentatively concluded that SBC Communications Inc.'s $61 billion purchase of Ameritech Corp. should be blocked unless market opening conditions are attached, agency officials said Thursday.
The conclusion has not been approved by the five commissioners who run the agency. The FCC staff members made their recommendation at the start of a two-day hearing on what conditions could be devised to make the merger of the two local phone carriers better for consumers and competitors.
FCC Chairman William Kennard told the companies last month that the agency had "serious concerns" about the merger. The search for conditions began because FCC staff members thought that the proposed deal "flunks the public interest test," Thomas Krattenmaker, who is overseeing the FCC merger review, said at the hearing.
"It is a tentative conclusion," Krattenmaker added. "We have not fixed our mind on these answers."
The FCC fears that the combination of SBC (SBC), the dominant provider of local phone service in the Southwest, and Ameritech (AIT) , the dominant carrier in five Midwestern states, could quash competition and would complicate the FCC's task of overseeing the phone industry, Krattenmaker said.
In response, SBC and Ameritech officials said the merger would give customers a new telecommunications option and would create thousands of quality jobs.
"People who have given the merger fair consideration have arrived at the same conclusion: It is in the public interest because it will create new jobs and give consumers across the country a new alternative for their telecommunications needs," SBC chairman and CEO Edward E. Whitacre Jr. said in a statement.
The two companies released a list of more than 200 individuals and groups who are supporting the merger, including the AFL-CIO, the Communications Workers of America, several state chapters of the NAACP and numerous elected officials.
"The people who had the most reason to be skeptical of the merger have come to embrace it," said Richard C. Notebaert, chairman and CEO of Ameritech. 
-- from staff and wire reports
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