FCC to vote on proposed telecom mega-mergers

The Federal Communications Commission is expected today to vote on two proposed multibillion-dollar telecommunications mergers that would create industry giants.

The FCC will decide whether to approve SBC Communications Inc.'s $16 billion purchase of AT&T Corp. and Verizon Communications Inc.'s $8.5 billion purchase of MCI Inc.

The vote was expected at the regulatory agency's meeting last Friday, but was postponed until today because FCC commissioners could not agree on the conditions to add to the deals. The FCC issued a notice Oct. 28 postponing the open meeting until today.

FCC commissioners continued their negotiations through the weekend, UPI reported yesterday.

The Justice Department approved the transactions Oct. 27. The deals also have received the approval of international regulators.

In the federal market, the mergers would position the combined companies as two of the three major carriers that will grab the lion's share of government telecom opportunities.

Both AT&T and MCI are heading teams to compete for the $20 billion Networx telecom services and networks contract, which will be awarded next year. Sprint Nextel Corp. and Qwest Communications International Inc. also have formed separate teams to pursue Networx.

Verizon is bidding on its own against the major carriers and a handful of other companies for the less lucrative part of Networx, called Enterprise, which offers a mix of specialized Internet protocol or wireless services in specific geographical areas.

MCI and Sprint are the incumbents on the government's existing FTS2001 contract, which Networx will replace when FTS2001 expires next year. Both companies already have a long roster of federal clients.

Both deals are expected to close either by year-end or the beginning of next year.