According to a piece in the Wall Street Journal this morning, the FCC is on the cusp of approving Verizon’s purchase of MCI and SBC’s purchase of AT&T, with Commissioner Kevin Martin pushing for approval as early as tomorrow. But there could be some conditions attached to the approvals that neither acquirer likes.
The Justice Department, the main government arm charged with approving, rejecting or modifying mergers on antitrust grounds, is apparently concerned with the reduction in competition in the enterprise market in areas where Verizon currently overlaps with MCI, or SBC overlaps with AT&T. One possible merger approval condition that DOJ is eyeing would be to require the telcos to divest their enterprise businesses to a third party in overlap situations. Rejected MCI suitor Qwest is apparently a good candidate to buy the business lines, and compete against the merged companies, if such a divestiture were ordered.
DOJ is also apparently troubled by the telcos’ practice of selling DSL to local voice customers only, and wants to end these tying arrangements by requiring the sale of “naked DSL,” which would allow anyone to buy DSL regardless of whether they also purchase local phone service from the companies.
Cynthia Brumfield at 7:33 AM|Comments(0)
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