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NEW YORK and ASHBURN, Va. - California today gave its final approval to the proposed acquisition of MCI, Inc. (NASDAQ:MCIP) by Verizon Communications Inc. (NYSE:VZ) after concluding the transaction advances the public interest, benefits consumers and has no adverse effects on competition.
Today's action by the California Public Utilities Commission, which comes less than three weeks after the Federal Communications Commission provided final federal approval of the Verizon-MCI combination, adds momentum to the regulatory approval process as it heads into its final stage.
Executives of both companies anticipate that the transaction will close, as planned, next month or very early in January. The Verizon-MCI combination was announced on February 14.
"California's decision is good news for customers and confirmation that the Verizon-MCI combination is in the public interest," said Tim McCallion, Verizon's California president. "This is a major milestone in the approval process, and it increases the momentum as we near the finish line. We are eager to offer the benefits of this new combination to customers in California and across the nation as soon as possible."
Jim Lewis, MCI senior vice president of policy and planning, said, "We appreciate the commission's timely review and recognition that this transaction will benefit California consumers and the business community. The PUC's examination of the extensive record demonstrates that our merger will promote competition and benefit American consumers and businesses."
As part of California's approval, Verizon will continue its rollout of stand-alone DSL broadband service and the company will contribute $15 million to a fund supporting ubiquitous access to broadband and advanced services in California. Verizon has also agreed to increase its philanthropic giving in California by $20 million over the next five years.
The commission's findings in favor of the transaction are supported by an extensive public review and evidentiary record, including findings by the California attorney general that the combination would not harm competition. Over 200 community, civic and business leaders registered their support for the business combination at six public participation hearings held in August.
The Verizon-MCI combination, part of the continuing evolution of the industry driven by customers and technology, will capitalize on the complementary strengths of each company and create one of the world's leading providers of communications services.
The combined company will be better able to compete for and serve large-business and government customers by providing a full range of services, including wireless and sophisticated Internet protocol-based services. Consumers and businesses will also benefit because the new company will have the financial strength to maintain and improve MCI's extensive Internet backbone network.
Verizon Communications Inc. (NYSE: VZ), a Dow 30 company, is a leader in delivering broadband and other communication innovations to wireline and wireless customers. Verizon operates America's most reliable wireless network, serving 49.3 million customers nationwide, and one of the nation's premier wireline networks, serving home, business and wholesale customers in 28 states. Based in New York, Verizon has a diverse workforce of nearly 215,000 and generates annual revenues of more than $71 billion from four business segments: Domestic Telecom, Domestic Wireless, Information Services and International. For more information, visit www.verizon.com.
MCI, Inc. (NASDAQ: MCIP) is a leading global communications provider, delivering innovative, cost-effective, advanced communications connectivity to businesses, governments and consumers. With one of the most expansive global IP backbones and wholly-owned data networks, MCI develops the converged communications products and services that are the foundation for commerce and communications in today's market. For more information, go to www.mci.com.
NOTE: This press release contains statements about expected future events and financial results that are forward-looking and subject to risks and uncertainties. For those statements, we claim the protection of the safe harbor for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995. The following important factors could affect future results and could cause those results to differ materially from those expressed in the forward-looking statements: a significant change in the timing of, or the imposition of any government conditions to, the closing of the transaction; actual and contingent liabilities; and the extent and timing of our ability to obtain revenue enhancements and cost savings following the transaction. Additional factors that may affect the future results of Verizon and MCI are set forth in their respective filings with the Securities and Exchange Commission, which are available at investor.verizon.com/SEC/ and www.mci.com/about/investor_relations/sec/.