WASHINGTON-A New York federal judge last week refused to block the proposed merger between AT&T Corp. and McCaw Cellular Communications Inc., but agreed to a speedy trial of two regional Bell telephone companies’ lawsuit to halt the transaction on antitrust grounds.
U.S. District Judge Edward Korman, following negotiations with attorneys from AT&T, Bell Atlantic Corp. and Nynex Corp., set a Nov. 1 trial date in Brooklyn federal court. Terms and conditions agreed to by the various parties have McCaw being held and operated as a separate company so it can easily be divested if Korman rules in favor of Nynex and Bell Atlantic.
“This is a significant victory for Bell Atlantic and Nynex,” said James Young, general counsel for Bell Atlantic. “We won a prompt trial in which we will prove that this merger is anti-consumer and anti-competitive.”
The Bell companies claim the merger would enable AT&T to use its dominant position in long-distance and cellular to stifle competition.
An AT&T spokesman welcomed Korman’s ruling because the judge did not grant a preliminary injunction to stop the merger with McCaw, noting the deal needs only Federal Communications Commission approval to be completed this month. The Justice Department and U.S. District Judge Harold Greene have ruled in AT&T-McCaw’s favor on issues that could have blocked the merger. Greene must still rule on the merger itself.
