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Baby Bells get FCC nod
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September 29, 2000: 6:36 p.m. ET
SBC, Bell South take next step toward wireless joint venture
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NEW YORK (CNNfn) - SBC Communications Inc. and BellSouth Corp. came one step closer to creating the nation's No. 2 wireless communications services providers Friday, winning approval for the proposal from the Federal Communications Commission.
"The combination of SBC and BellSouth's U.S. wireless properties will not adversely affect competition in any U.S. telecommunications market and will permit the companies to form a wireless network capable of competing with other companies that provide service on a nationwide basis," the FCC said in a statement.
The FCC's granted its approval on the condition that the company's divest their interest in overlapping wireless businesses in 16 markets including Louisiana, Indiana and California.
Those are the same conditions the U.S. Justice department demanded when it approved the joint venture late last month.
SBC (SBC: Research, Estimates) and BellSouth (BLS: Research, Estimates) in April agreed to combine their wireless operations in a joint venture which would reach 70 percent of the nation on networks in 19 of the top 20 markets.
The joint venture, to be called Alloy LLC, would have roughly 17.9 million subscribers -- mostly in the West, Southwest and Southeast, putting it in the No. 2 slot just behind Verizon Wireless, part of Verizon Communications (VZ: Research, Estimates), which has 25.4 million subscribers.
 Stephen Carter, president of SBC Wireless, will serve as president and chief executive officer of the joint-venture company.
Under the terms of their agreement, SBC will own 60 percent of the new venture; BellSouth, which provides local-phone service in nine states stretching from North Carolina to Florida, will own the rest. It is expected to generate more than $10 billion in annual revenue.
The ownership percentages are based on the value of the assets each company is contributing to the venture. The new company's earnings will flow back to its parent companies in the same proportion.
With the FCC approval out of the way, the company is poised now to close the deal early next week.
"We have to divest some properties where there was some overlap, which will probably happen on Monday. Then that will put us in a position to sign the final papers between SBC and BellSouth," SBC spokesman Selin Bingol told CNNfn.com Friday.
Shares of SBC rose 19 cents to $49.88 Friday. BellSouth (BLS: Research, Estimates) added $1.12 to $40.50. 
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SBC, BellSouth
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