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RealTime IT News

SBC Slapped With $6M Fine

Federal regulators fined SBC Communications Inc. $6 million Wednesday for violating the terms of its 1999 merger with Ameritech, a Regional Bell Operating Company (RBOC) operating in the Midwest.

The Federal Communications Commission said an investigation prompted by competitor complaints found that San Antonio-based SBC attempted to restrict the ability of carriers in five states to share its network.

Many local phone companies that lack their own networks and equipment rely on the RBOC facilities to be able to offer competing services. The 1996 Telecommunications Act made it possible for new local carriers to lease lines from RBOCs companies, including SBC and Ameritech, so they could provide service options for customers.

FCC Chairman Michael Powell condemned SBC's violations of local competition rules.

"Such unlawful, anticompetitive behavior is unacceptable," he said. "Instead of sharing, as the law requires, SBC withheld and litigated, forcing competitors to expend valuable time and resources."

James Smith, SBC senior vice president, said in a statement that the company believes the FCC is in error.

"We believe that the Commission has mistakenly interpreted not only the letter, but also the intent of the shared transport merger condition," Smith said.

Smith added that SBC is reviewing the FCC's action and is considering what to do next. The company contested the fine when the FCC proposed it in January.

The FCC approved the merger between SBC and Ameritech in October 1999 after adopting 30 conditions to ensure the deal would serve the public interest.

The FCC had required SBC to give competitors providing local telephone service in five states access to its network for local toll calls on certain favorable terms. The five states include Wisconsin, Illinois, Indiana, Ohio and Michigan.