WASHINGTON-Two telecommunications mega-mergers hit snags last week as the Federal Communications Commission said it had serious concerns about the SBC/Ameritech combination and the Virginia State Corporation Commission disapproved of the marriage between Bell Atlantic Corp. and GTE Corp., saying it lacked enough information to proceed.
The FCC has set up a 90-day review process to see “whether it would be possible to craft conditions that address the public-interest concerns,” said FCC Chairman William Kennard in a joint letter to Ameritech Corp. and SBC Communications Inc.
A proposed outline contained in the letter calls for a decision on the merger by the end of June. The schedule includes a public forum later this month to include FCC staff and SBC/Ameritech representatives reporting on the status of discussions and any conditions placed on the merger. Public-interest representatives then could comment at the forum on the tentative conditions and propose additional ones. All other meetings would be subject to FCC notification rules.
While Bell Atlantic/GTE have no overlapping cellular properties in Virginia, there are some overlaps between GTE Wireless and PrimeCo Personal Communications L.P. in southern Virginia, said Bob Bishop, director of media relations for GTE Service Corp.
The state commission decision is not a rejection, said agency spokesman Ken Schrad. The companies have 180 days to refile the petition with more information about the impact of the merger on customers. It could take up to six months before the SCC makes a decision on the revised petition.
Bell Atlantic and GTE still are waiting for approval from the Department of Justice and the FCC, but 28 states either have approved the merger or said they do not have jurisdiction to consider it. If Virginia denies the merger or fails to rule on it before federal approval is granted, the companies still could merge everywhere but in Virginia.
Meanwhile, the Department of Defense is engaging in discussions with AirTouch Communications Inc. to address national security concerns shared by the FBI regarding its proposed merger with Vodafone Group plc.
“[The Defense Department] and the [FBI] have previously voiced national security and law enforcement concerns when it has been proposed that a foreign entity become a major player in domestic communications … Grant of [this merger] would result in total foreign ownership of a very large domestic telecommunications industry participant,” said the DOD in FCC comments filed last month.
DOD and the FBI engaged in similar discussions with MCI Communications Corp. when it was considering merging with British Telecommunications plc. That proposed merger was later canceled and MCI merged with WorldCom Communications Inc.
The government is not asking the FCC to deny the merger request but will keep the FCC aware of developments in the discussions.
The FBI is expected to file similar comments, DOD said, but as of press time, no such comments were available.
However, two entities filed comments opposing the AirTouch/Vodafone merger. Both companies are involved in legal proceedings with AirTouch and said they believe the merger should not be approved until the proceedings have been completed.
Eastern Airwaves L.L.C. and Desert Mobile L.L.C. want to offer service in rural Nevada but AirTouch currently holds those licenses, although it has not built them out.
Communications Information Services Inc. is battling AirTouch in federal court in Seattle regarding a patent dispute. “CISI believes that AirTouch … has knowingly and willfully infringed [on its] patent, despite having full knowledge of the [patent] and previously having engaged in negotiations with CISI with regard to the licensing of this technology,” said CISI in its comments.
Various wire services contributed to this report.
