Byline: Amy Lane
LANSING - Michigan doesn't have formal authority over the $16 billion SBC Communications Inc. acquisition of AT&T Corp., but it may still weigh in.
Michigan Public Service Commission member Robert Nelson said the potential loss of competition is a key consideration. Michigan regulators in 2003 gave SBC clearance to sell long-distance service based on findings that it had sufficiently opened its local-phone market to competitors. If the level of competition "is reduced significantly,'' the Federal Communications Commission could revoke the long-distance clearance, Nelson said.
"It's something I think we should take a hard look at,'' he said. "That approval was based on the fact that there was a certain level of competition.''
SBC spokesman Howard Riefs said SBC thinks the combination of the two companies will enhance competition, not only outside of SBC's traditional service territory, but within it as well. AT&T last year pulled back from marketing local land-line phone service, so the total number of providers wouldn't change as a result of the acquisition, Riefs said.
The acquisition would merge AT&T's global reach and strengths serving business and government with SBC's local-phone, broadband and wireless footprint.
The transaction is subject to approvals that include AT&T's shareholders, the FCC, the U.S. Department of Justice and some state regulatory commissions. The companies hope to close the transaction by the first half of 2006.
For local-phone competitors, the merger would bring the loss of a big advocate: AT&T, said Rick Coy, general counsel for the Competitive Local Exchange Carriers of Michigan. He is a member in the Lansing office of Clark Hill plc.
"But the competitors are still going to have to go on and protect competition ... and deal with what will be an even larger incumbent provider,'' Coy said. He said AT&T also has helped give credibility and viability to emerging technologies, like Voice over Internet Protocol, or Internet phone service.
SBC Chairman and CEO Edward Whitacre Jr. said the combined company will "deliver the next generation of communications.''
Electric-choice grows
The Michigan Public Service Commission said that in 2004, the third full year of customer choice, alternative suppliers were responsible for about 15 percent of electricity sales in Detroit Edison Co. and Consumers Energy Co. territories, up from about 10 percent in 2003.
In Detroit Edison's service area, the number of customers served by alternative suppliers rose 40 percent in 2004, compared with the 138 percent rise in 2003. An estimated 32 percent of commercial and 23 percent of industrial sales were with alternative suppliers.
At Consumers, customers served by alternative suppliers rose 81 percent in 2004, compared with 44 percent in 2003. An estimated 10 percent of commercial and 22 percent of industrial sales were with alternative suppliers.
Comings & goings
* Semone James, Michigan Department of Treasury investment specialist/senior portfolio manager, has been named executive director of the Michigan Land Bank Fast Track Authority.
* Michael DeVos, former director of development at the Maine State Housing Authority, has become executive director of the Michigan State Housing Development Authority.
* Daniel Gilmartin, deputy director of the Michigan Municipal League, has been appointed executive director.
* Jim Murray, former deputy chief of staff for past House Speaker Rick Johnson, R-LeRoy, has joined SBC Communications Inc.'s Michigan operations, as director of government relations.
* Gary Naeyaert, former director of government and public relations for the Michigan Road Builders Association, has formed a Lansing lobbying and public-relations firm, Naeyaert Advocacy Group.
Amy Lane: (517) 371-5355, alane@crain.com
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