Ameritech pushes merger

Ameritech Corp. executives on Friday launched a public relationsbattle to get state and federal regulators to approve its merger withregional phone rival SBC Communications, even as shareholders gavethe deal their support.

Nearly 95 percent of Chicago-based Ameritech's shareholdersvoted to approve the $56 billion merger, a day after shareholders ofSan Antonio-based SBC approved issuing additional stock for the deal.

Ameritech would become a subsidiary of SBC if the buyoutreceives regulatory approval next year, with shareholders owningabout 42 percent of SBC stock.Ameritech Chairman Richard Notebaert applauded the overwhelmingshareholder support for what he says would be the creation of anational carrier able to compete on a global scale. But much of histime at the special meeting was devoted to deriding those seeking toderail the deal."This idea of regionalization is something that is in the past,"he said after the meeting. "It doesn't fit into the future. Whatcustomers need today is the ability to choose from four, five or sixnational providers, not just two."The merger faces opposition from an unusual coalition ofbusinesses and consumer groups that have been partly financed bylong-distance companies. They have run anti-merger televisionadvertisements in several Midwestern states and intensely lobbiedregulators.Notebaert called the ads an attempt to deceive consumers with"false and misleading scare tactics concocted by competitorsdedicated to protecting their own bottom line."Consumer groups strongly oppose the spate of telecommunicationsmergers that has been sweeping the industry since Congress relaxedrestrictions in the industry in 1996. They argue service and costshave gotten worse.Long-distance companies oppose the mergers of regional phonecompanies until those companies make it easier for competitors tooffer local phone service.Federal regulators say they're taking a hard look at whether themerger - and a $52 billion deal that would combine Bell AtlanticCorp. and GTE - would be in consumers' interests. If bothcombinations are approved, nearly two-thirds of local phone lineswould be controlled by just two companies.The Ameritech-SBC combination must be approved by the FederalCommunications Commission, the Justice Department and regulators inIllinois and Ohio.The outcome could determine how much consumers pay foreverything from local and cellular phone service to cable televisionand high-speed Internet connections.Notebaert, as he has in the past, contended Ameritech has openedits five-state territory to competition. But large long-distancecompanies contend the terms are too stiff to make money.He also said the proposed "national-local" strategy of thecombined SBC would foster competition and lead to lower prices forconsumers. The companies hope to offer bundled packages of local,long-distance, cellular, Internet and cable services in 30metropolitan areas outside of their combined territories.