YORK and ASHBURN, Va. - Federal Communications Commission today approved the proposed acquisition of MCI, Inc. (NASDAQ:MCIP) by Verizon Communications Inc. (NYSE:VZ) after concluding the transaction advances the public interest.
Coming just days after the U.S. Department of Justice cleared the Verizon-MCI combination following a comprehensive, eight-month review, today's action by the FCC increases momentum as attention turns toward the handful of states with approvals still pending.
Executives of both companies anticipate that they can close the transaction, which was announced on February 14, later this year or early in 2006.
"After two federal reviews and strong approvals by shareholders and the international community, it is clear that this combination is undeniably in the public interest," said Tom Tauke, Verizon executive vice president of public affairs, policy and communications. "The Department of Justice and FCC approvals put us on firm footing as we seek the remaining few state approvals."
Jim Lewis, MCI senior vice president of policy and planning, said, "This approval represents a significant milestone in the regulatory approval process, and we look forward to delivering the benefits of this transaction to U.S. consumers and the enterprise market as a combined company."
As part of the FCC approval, Verizon and MCI committed to continue the rollout of Verizon's stand-alone DSL service, continue to adhere to "network neutrality" principles adopted by the FCC earlier this year, cap temporarily certain special access and UNE rates, and maintain for a period of time the current number of settlement-free Internet peering arrangements.
On Thursday, the DOJ filed for approval by a federal court a consent decree that includes stipulations agreed to by Verizon and MCI. Under the decree, Verizon and MCI will lease dark (unused) fiber connections to 356 buildings in several states in the Verizon footprint on the East Coast.
Fiber currently being used to serve customers will not be affected.
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/.