Mo. Ops Lose Round Vs. Telco Merger

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Missouri regulators have handed SBC Communications Inc. and
Ameritech Corp. a victory by refusing to scrutinize the proposed merger between the two
telcos.

The cable industry is among the groups fighting the deal.

The state Public Service Commission recently rejected a
request by the Missouri Public Counsel for a hearing on the competitive impact of the
merger on the local telephone market.

In its order, the commission said it had no jurisdiction
over a merger at the SBC/Ameritech corporate levels, but only over their subsidiaries that
do business in the state, Southwestern Bell and Ameritech Communications.

Michael Dandino, assistant MPC counsel, called the ruling
an "abdication of authority" to the Federal Communications Commission, noting
that the state PSC was allowing the telcos to "avoid any public scrutiny."

"I think it's narrow-sighted," Dandino said.
"They have a duty to investigate the impact of this merger on the local telephone
market."

The decision was also a blow to Show Me Competition, a
coalition of business interests that includes AT&T Corp. and the Missouri Cable
Telecommunications Association.

The group opposes the merger and SBC's desire to get
into the in-state long-distance business. It argued that the regional Bell operating
company has failed to open its market to competition, as required by the
Telecommunications Act of 1996.

"Obviously, there wouldn't be a lot of incentive
to open the market once they merge," SMC spokeswoman Diane Miller said.

The commission's decision was a setback for AT&T,
as its acquisition of Tele-Communications Inc. is expected to pave the way for the
long-distance carrier to get into the local loop in the St. Louis area.

AT&T officials declined to comment last week.

SBC recently responded to opponents in Ameritech's
region by issuing a statement in which it accused competitors of spreading misinformation
in order to protect their own markets from the telecommunications giant that would be
created by the merger.

SW Bell is Missouri's largest local-exchange carrier,
with more than 2 million phone lines, while Ameritech has been certified as a competitive
LEC in the St. Louis area.

Meanwhile, regulators in Ohio, Indiana and Illinois -- all
Ameritech states -- are taking at least a preliminary look into allegations that a merger
would stifle competition.

Dandino said the MPC would join state agencies in Ohio,
Michigan, Illinois, Texas and California in filing comments against the merger with the
FCC.

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