SBC/AT&T Merger Request

FACT SHEET

SBC and AT&T have filed a request to merge AT&T’s operation into SBC’s. Groups that may be impacted by the merger include residential, small business customers, and other telecommunications carriers.

SBC and AT&T state the merger will serve communications markets better, but Consumer groups and competing service providers have expressed concern about the merger.

• Consumer groups and competing service providers have commented that the merger may extend SBC’s dominance in the market and could reduce competition for local and long distance service.
• Consumer groups believe that the merger could have adverse affects on customers who have no other telecommunications company providing the service(s) they need.
• Consumer groups indicate that the request fails to demonstrate how it will deliver short- and long-term benefits to customers.

Section 854 of the California Public Utilities Code specifies that utilities must obtain CPUC approval before they can merge. In considering the proposed transaction, the CPUC will determine whether it is in the public interest. Among the criteria that the CPUC will consider are that:

• The merger provide short-term and long-term economic benefits to ratepayers
• It equitably allocate the total economic benefits between shareholders and ratepayers.
• The merger not adversely affect competition.

Other regulatory agencies that will review the proposed merger are the California Attorney General’s office, the Federal Communications Commission, and the U.S. Department of Justice.

Many individuals or organizations (parties) either protest or support the proposed merger.

• Seventeen parties contend that the merger would be detrimental to the public interest. These include city and county representatives, special interest organizations including consumer advocacy groups, and companies that believe they will be adversely affected by the merger.
• Twelve organizations support the merger. These are mostly chambers of commerce and economic development groups.

The CPUC anticipates it will complete its review and reach a decision by the end of 2005.

The schedule for the proceeding follows:

Applicants’ Opening Testimony May 6, 2005
Intervenors’ Reply Testimony June 10, 2005
Public Participation Hearings June 14, 15, 20, 27-30
Concurrent Rebuttal Testimony June 8, 2005
Attorney General’s Statement July 22, 2005
Second Prehearing Conference July 29, 2005
Evidentiary Hearings August 8-19, 2005
Opening Briefs September 9, 2005
Reply Briefs September 19, 2005
Proposed Decision October 19, 2005
Final Commission Decision November 18, 2005