FCC Approves Largest Merger in Telecom History: One "Local Company" from Maine to Virginia

The Federal Communications Commission approved the $25.6 billion merger of Bell Atlantic and Nynex in August, creating a single local telephone company from Maine to Virginia, the nation's second largest telecommunications company, created by the largest merger in telecommunications history. The shares of both companies rose in anticipation of approval. FCC Chairman Reed Hundt, who administered the approval, nevertheless suggested that a more restrictive approach to mergers was forthcoming. "It sends a clear message of negativism toward any hypothetical merger of AT&T and a Bell, or even a merger of two Bells."

But observers called Hundt's behavior far from clear. The NY Times reported that it was a "day of mixed messages" for the chairman. "Yesterday morning, in a speech at the Enterprise Institute in Washington, Mr. Hundt lamented the FCC's inability to promote competition in the local phone business. Hours later, the commission approved the largest merger in the history of telecommunications."

Ironically, Bell Atlantic and Nynex pledged to open their local markets in return for the approval, as if to ignore federal laws requiring them to do so. Local telephone monopolies are widely criticized for obstructing competitors since local markets were opened by law in 1996. END

Copyright 1997 by the American Local Power News