NEW YORK (AP) — SBC Communications Inc. completed its purchase of former parent AT&T Corp. on Friday after California officials removed the final regulatory hurdle for the $16 billion deal.
The California Public Utility Commission also gave their consent to Verizon Communications Inc.'s planned purchase of MCI Inc. for about $7.5 billion, though that deal is still awaiting approval in other states.
The two deals highlight the fading distinction between local and long-distance calling as separate services, while ushering in a new era dominated by direct competition with cable TV and wireless providers rather than among individual phone companies.
SBC, which already had said it was changing its name to AT&T, announced Friday it also will be assuming AT&T's long-time stock trading symbol, "T," starting Dec. 1. The company also said it will unveil a new corporate logo on Monday.
The California commission's votes came nearly 10 months after AT&T agreed to be acquired by its former subsidiary and follows approvals by two federal agencies, 36 other states and 14 other countries. SBC originally predicted the entire regulatory process might take almost a year and a half.
"We worked (the regulatory review) real hard, and we've got some agencies who understand the world has changed," SBC Chief Executive Edward Whitacre said in an interview, referring to the long-standing mentality that there's little competition because too few companies control the nation's phone lines.
Still, while the swift merger approvals show that regulators see the competition from new technologies and rivals, many have insisted on concessions from SBC and Verizon to bolster certain market segments. On Friday, the California commission extracted conditions similar to those imposed on the companies by the U.S. Department of Justice and the Federal Communications Commission.
For example, SBC and Verizon have agreed to stop requiring customers who want high-speed DSL Internet access to buy local phone service as well. The FCC also required them to freeze for 30 months the wholesale prices they charge competitors to lease certain high-capacity business lines.
The companies also have promised not to hinder Internet access to consumers or the free flow of Internet traffic on their networks — a topic that Congress is debating as part of a new bill governing the telecommunications industry.
Whitacre recently drew criticism by suggesting his company — which is investing billions of dollars to upgrade its phone network for TV and advanced multimedia services — has the right to charge Web-based providers of rival services to deliver their products to customers over SBC's lines.
Before the deal closes, AT&T will be paying a special dividend of $1.30 per share to its 2.3 million stockholders under the terms of the agreement with SBC.
San Antonio-based SBC is one of the regional "Baby Bells" created by the 1984 breakup of AT&T's national monopoly on local and long-distance phone service.
AT&T brings a national fiber-optic network and a valuable base of corporate accounts to SBC's largely regional, consumer-oriented business. AT&T also gives SBC the international capabilities needed to serve companies with far-flung operations.
After the deals, SBC and Verizon would rank as either the first or second largest U.S. providers of local, long-distance, wireless and high-speed Internet services. The company owns a majority stake in Cingular Wireless in partnership with BellSouth Corp.