Majority of FCC OKs Cingular-AT&T Wireless-Source

[mendel]

Majority of FCC OKs Cingular-AT&T Wireless-Source
Wed Oct 13, 2004 03:14 PM ET

By Jeremy Pelofsky
WASHINGTON (Reuters) - A majority of the U.S. Federal Communications Commission has voted to conditionally approve Cingular Wireless' proposed acquisition of AT&T Wireless Services Inc., a source familiar with the matter said on Wednesday.

Three of the five FCC commissioners have voted to back the deal with certain divestitures, likely in up to two dozen markets, said the source, who declined to be identified because the voting had not been completed.

The three Republicans have backed the deal, Chairman Michael Powell and Commissioners Kathleen Abernathy and Kevin Martin while the Democrat commissioners, Michael Copps and Jonathan Adelstein, have not yet voted, the source said.

Until the voting is completed, the approval and proposed divestitures are not final, so commissioners could seek changes, which could lead to vote changes, as well.

FCC spokeswoman Lauren Patrich declined to comment.

Cingular spokesman Clay Owen declined to comment until the company received official word from the FCC. He said they still hope to close the deal by the end of the year.

Antitrust authorities at the U.S. Justice Department are expected to also approve the deal with some conditions but will likely act in conjunction with the FCC.

Cingular, a joint venture of BellSouth Corp. and SBC Communications Inc., agreed to pay $41 billion in cash for AT&T Wireless. They have already agreed to sell some airwaves in markets where together they would hold more than 80 Megahertz of airwaves.

The companies will likely have to sell assets, airwaves or customers in up to two dozen counties, particularly in rural areas where the number of competitors to the new company would shrink to one or two, sources have said previously.

That would likely mean they would have to sell airwaves in parts of Texas, Georgia, Florida, and Oklahoma.

The companies had said they would not divest more than $8.25 billion worth of assets to win regulatory approval, and one analyst said the FCC and Justice Department would probably not come close to seeking that much.

"I don't think it will get that high," said Legg Mason analyst Rebecca Arbogast.

If approved, Cingular would become the biggest U.S. wireless carrier, jumping past Verizon Wireless, which is a joint venture of Verizon Communications and Vodafone Group Plc. .

Consumer groups have complained that the combination would lead to higher prices and fewer choices while concentrating control over the telecommunications market within SBC and BellSouth.

The companies have countered the objections by saying the deal would lead to more and better services for consumers.

AT&T Wireless shares were up 2 cents to $14.78 in afternoon trading on the New York Stock Exchange. SBC shares were down 26 cents to $26.63 while BellSouth shares were down 33 cents to $27.93 on the NYSE.


http://www.reuters.com/newsArticle.j...toryID=6492215

[jones]

Do they need 3 out of 5, or 4 out of 5 votes?

[Fire14]

From what i remember it's 3 out of 5 for a majority to consider it approved. I am suprised they didn't say that in the article. Probobly we will get an official response tomorrow at there meeting & they may want to wait till they get all 5 votes before saying anything official, but unless there are serious reasons for the other 2 to say No, i don't think they will stop it.

[Etorres777]

Wow, it's getting closer!

[Steve B]

As I understand it, they need a 3 of 5 majority for it to pass. However, they aren't speaking out about it (officially) until they have all 5 votes. They do however, have 3 of 5 votes already. So we should have official word in the next couple days or so.

[bobolito]

What I don't get is why are some articles stating that "Cingular hopes closing by the end of this year" and others state "Cingular hopes to close by the end of this month"

[EdwardP]

Originally Posted by bobolito What I don't get is why are some articles stating that "Cingular hopes closing by the end of this year" and others state "Cingular hopes to close by the end of this month"

Doesn't the DoJ have to sign off on the deal as well as the FCC?

[Fire14]

I think Cingular hopes to close it this month, but with the delay's they have been getting from the FCC being past the 180 day mark & not hearing from the DOJ yet (which i believe will be at the same time as the FCC) they don't want to say the end of the month but are better off saying year to cover themselves with investors & such. I think sometimes they are trying to be optimistic & sometimes a little bit more of hopefulness.

[bobolito]

The DOJ is done already, I believe. They are just waiting for the FCC so they can act together.