DOJ OK’S $78.5B AT&T-BELLSOUTH MERGER

WASHINGTON (AP)—The Justice Department approved AT&T’s buyout of BellSouth Corp. on Wednesday, clearing a major hurdle for reuniting two modernized parts of the old Ma Bell phone monopoly that the government broke up in 1984.

The decision leaves the Federal Communications Commission as the final hurdle for a $78.5 billion deal to create the nation’s biggest provider of phone, wireless and broadband Internet services.

The decision was immediately criticized by FCC member Jonathan S. Adelstein, who called it ”a reckless abandonment of DoJ’s responsibility to protect competition and consumers.”

The FCC is scheduled to vote on the matter Thursday, though there’s been speculation the agency may hold off because of political pressures from Congress about the deal’s possible impact on market competition.

If the deal wins final government approval, the merger would give San Antonio-based AT&T Inc. total control over the nation’s largest cellular provider, Cingular Wireless, a joint venture of the two phone companies that serves 57.3 million customers.

The outcome at the FCC is far from certain. Republican Chairman Kevin Martin circulated an order recommending approval of the merger last month and probably will receive support from fellow Republican commissioner Deborah Taylor Tate.

With Adelstein and another Democrat, Michael Copps, criticizing the merger and Robert McDowell, the third Republican on the commission, prepared to recuse himself because he once lobbied on behalf of communications firms, Thursday’s vote could result in a 2-2 deadlock. Historically, in that type of situation, the item is pulled from the FCC’s meeting agenda until a compromise can be reached.

The combination of San Antonio-based AT&T and Atlanta-based BellSouth would create a company of 300,000 employees with operations in 23 states. AT&T estimates that about 10,000 redundant jobs would be phased out over three years.

The Justice Department decision came just seven months after AT&T announced its intentions on March 5 to buy BellSouth _ a breakneck pace for a merger of its size and scope.

Combined, the companies generate $117 billion in revenue, operate 68.7 million local phone lines across 22 states stretching coast to coast across the southern United States and up through the Midwest. The merged company would employ 309,000 people, though AT&T said it plans to eliminate up to 10,000 jobs over three years to cut costs.