The Federal Communications Commission on Friday approved
AT&T Inc.’s $86 billion acquisition of BellSouth Corporation, making it the
largest telecoms merger in U.S. history.
The completion of the BellSouth acquisition comes after an
extensive review process which included approval by or filings with 36 states,
the U.S. Department of Justice and the FCC, as well as with three foreign
countries. In order to receive bipartisan FCC approval, AT&T volunteered to make broadband access increasingly
affordable and available to consumers and to support public safety.
Through a combination of technologies, AT&T is committed to making broadband services
available to 100 percent of residential
living units in it's 22-state local-phone-service territory by the end of 2007. Additionally,
AT&T will offer a stand-alone broadband service for $19.95 as well as
other offers to encourage broadband adoption by those who do not currently
The transaction also consolidates ownership and management
of Cingular Wireless and Yellowpages.com. AT&T will immediately integrate and converge AT&T, BellSouth and Cingular wireless and
wire line Internet Protocol networks, combine product portfolios and integrate
customer care capabilities. The new company also plans to expand the reach of
broadband access in remote and rural locations in the traditional BellSouth
"AT&T, BellSouth and Cingular have led in
developing and deploying many of the communications services that customers
depend on today, including broadband DSL and wireless technologies," said
AT&T Chairman and CEO Edward E. Whitacre Jr. "Moving forward, AT&T
will work to integrate these services for customers in the Southeast, across
the country and around the world."
AT&T will launch new advertising which will begin the transition of the BellSouth brand name to AT&T in the coming days. AT&T will re-brand Cingular through a co-branded transition which is scheduled to start in 2007. Details regarding the Cingular branding will be announced at a later date. Yellowpages.com will not undergo a name or Web site address change.
AT&T's corporate headquarters will remain in San
Antonio. The new AT&T Southeast (formerly BellSouth Corporation) and
Cingular will continue to be based in Atlanta.
Stockholders of the former BellSouth received 1.325 shares
of AT&T common stock for each common share of BellSouth. Based on
AT&T's closing stock price on Thursday, Dec. 28, 2006 this exchange ratio
equaled $47.04 per BellSouth common share. Since the merger was announced, the
market price of AT&T shares has risen 26.83 percent and BellSouth shares
have increased 48.76 percent. BellSouth's common stock and debt securities will be immediately delisted from the New York Stock Exchange in connection with the completion of the acquisition
AT&T plans to repatriate 3,000 jobs currently outsourced
by BellSouth outside the United States as well as to make its disaster-recovery
capabilities available to facilitate the restoration of services in
the former BellSouth region in the event of a hurricane or other natural
"These commitments reflect our long history of
providing consumers and businesses with the most advanced and affordable
communications services," said Whitacre. "We can't wait to show
people what the new AT&T can do."
The Communications Workers of America believe the
merger of AT&T and BellSouth will promote increased investment and
build-out of high-speed networks that are critical to the region's economic
growth and the nation's position in the global economy. CWA President Larry
Cohen said the merger agreement included real commitments by AT&T-BellSouth
for an expanded build-out of both higher speed Internet services and DSL, an
important step forward in bringing the full promise of the Internet to areas
that have been passed by.
"Workers at BellSouth know that the future of
communications and their own future is in the build-out of high-speed
telecommunications services. This merger will help provide the resources to
make this possible, and at the same time, should help create quality
jobs," said Noah Savant, CWA's vice president for the Southeast and
BellSouth territory. "Of course we remain concerned about the net effect
on jobs within the region for frontline employees and the services we provide.
We are pleased to see AT&T commitment to bringing thousands of support jobs
back to the United States," Savant added.
The U.S. has fallen to 16th in the world in terms of
availability and access to high-speed Internet services. The availability and
benefits of the Internet should be universal, but residents in rural
communities, low-income urban areas and other communities don't have high-speed
access and are at a growing disadvantage.
High-tech innovation and job growth, advances in telemedicine, distance learning, improving public safety and e-government all are possible and in fact routine in much of the world. In the United States, however, current speed standards are not sufficient to
support these kinds of services, Larry Cohen said. "The build-out of true
high-speed networks requires a huge investment of tens of billions of dollars
and the AT&T-BellSouth merger will begin to provide the resources to do
this," he added. Cohen also stressed that CWA strongly supports an open
Internet "where consumers can go where they want, when they want. Nothing
should be done to degrade or block access to websites," he said.