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California Approves SBC-AT&T and Verizon-MCI Mergers; SBC Closes AT&T Deal

California approved the SBC-AT&T and Verizon-MCI transactions on November 18, 2005. SBC closed its AT&T Corp. acquisition the same day, subject to California’s conditional regulatory finding.
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On November 18, 2005, the California Public Utilities Commission (CPUC) approved the SBC-AT&T and Verizon-MCI transactions. The SBC-AT&T approval was conditional: the Commission found that meeting its requirements would produce net consumer benefits without harming competition in California. SBC completed its acquisition of AT&T Corp. that same day and adopted the name AT&T Inc.

What California approved on November 18, 2005

The CPUC announced approval of two transactions: SBC Communications’ acquisition of AT&T Corp. and Verizon’s merger with MCI. The approvals concerned California-regulated telecommunications operations, rather than serving as a blanket endorsement of every effect of either national transaction. The Commission’s announcement also reported nearly $100 million in combined-company commitments to expand broadband and advanced telecommunications access in underserved California communities.

CPUC President Michael R. Peevey said, “These new entities will be strong competitors in the global telecommunications market, and California consumers stand to benefit.” That statement described the Commission president’s public rationale; the SBC-AT&T decision’s operative finding was tied to compliance with conditions.

Why the SBC-AT&T approval was conditional

The CPUC decision addressed the transfer of control of AT&T’s California communications affiliates to SBC. It concluded that compliance with the adopted conditions would produce net consumer benefits without adversely affecting competition in California telecommunications. The Commission warned that it could not approve the merger if the applicants declined to implement those conditions. This was a conditional regulatory finding, not an unconditional conclusion that the transaction would benefit consumers regardless of how it was carried out.

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The cited announcement gives a rounded total for the broadband and advanced-telecommunications commitments, but does not itemize that amount. The available sources also do not establish how the commitments were allocated, detail each condition, or document later compliance; those specifics should not be inferred from the approval announcement.

When did California approve the SBC-AT&T merger?

The CPUC issued its approval on November 18, 2005. SBC completed its acquisition of AT&T Corp. on that same date, according to AT&T’s investor-history page. AT&T Corp. became a wholly owned SBC subsidiary, and SBC changed its corporate name to AT&T Inc.

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How the 2005 deals differ from earlier SBC mergers

The paired approvals in the November 18, 2005 announcement were SBC-AT&T and Verizon-MCI. The conditional transfer-of-control finding and the California access commitments described above relate to SBC-AT&T; the cited announcement names Verizon-MCI as the second approved transaction but does not provide comparable detail about its conditions.

This was not SBC’s earlier Pacific Telesis transaction. The CPUC announced approval of the Pacific Telesis-SBC merger on March 31, 1997, finding economic benefits for ratepayers and the state and no likely adverse effect on California competition. CPUC historical context also records SBC’s merger with Ameritech in 1999 and BellSouth in 2006; neither was one of the two deals in the 2005 announcement. The later SBC-AT&T acquisition is the transaction after which SBC took the AT&T Inc. name.

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