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Judge Seeks More Data on 2 Telecom Deals
By Arshad Mohammed, Staff Writer
Washington Post
Wednesday, July 26, 2006

A federal judge asked the Justice Department yesterday for more information to help him decide whether to approve two recent telecom mergers, an action analysts said could delay AT&T Inc.'s $67 billion bid to buy BellSouth Corp.

U.S. District Court Judge Emmet G. Sullivan is reviewing SBC Communications Corp.'s $16 billion acquisition of AT&T Corp. and Verizon Communications Inc.'s $8.5 billion purchase of MCI Inc.  After SBC bought AT&T Corp. last year, it adopted the name AT&T Inc.

While the AT&T and MCI deals have been completed, the judge must review them to decide whether the conditions imposed on them by the Justice Department are in the public interest.

Under a schedule laid out by the judge, the Justice Department has until Aug. 7 to submit information.  Opponents may then comment until Aug. 17.  The Justice Department has to respond by Aug. 28.

Regulatory analysts said they saw little chance that the judge would seek to undo the mergers, saying he might seek some changes to the consent decrees under which SBC and Verizon agreed to lease some of their high-capacity lines to their competitors.

"While we do not believe the prior . . . deals will be unwound, we believe the court's examination could have the effect of slowing government reviews of the pending AT&T-BellSouth deal," Blair Levin, a telecom analyst, wrote in a report.  The Justice Department is unlikely to complete its review of that deal until it sees how the judge rules on the earlier mergers, analysts said.

AT&T spokesman Michael Balmoris said the San Antonio company thinks the judge will "ultimately agree that the consent decree is in the public interest."

John Thorne, a senior vice president and deputy general counsel at New York-based Verizon, said he was confident the judge would not undo the Verizon-MCI merger or require significant changes to the consent decree.