Yesterday, the U.S. District Court in Washington, D.C., held a hearing to determine whether further legal proceedings were necessary in the ongoing review of the Department of Justice (DoJ) approval of the mergers of SBC/AT&T and Verizon/MCI. Ruling from the bench, the Court determined that because the DoJ has only submitted "unverified legal pleadings," additional record development is necessary. The timetable for submission of these additional evidentiary materials extends through August 27, although the Court noted that extensions to that timetable may be granted.

The Court also granted the motions of the New York Attorney General, the National Association of State Utility Consumer Advocates (NASUCA), and Sprint to intervene in the case and participate as amicus. The Court further granted the New York AG, NASUCA, and Sprint the opportunity to review and respond to the DoJ submissions.

The following comment can be attributed to Heather Gold, Senior Vice President of XO Communications, and a member of ACTel, the Alliance for Competition in Telecommunications:

"The Court recognized that the Department of Justice is obligated to provide a full accounting of its Bell merger approvals. By ordering further proceedings, the Court has ensured that the public interest, not the private interest of the Bell monopolies, will govern this review. The ongoing careful and deliberate judicial review of these unprecedented mergers will demonstrate that the public interest was not served by allowing the Bells to merge to monopoly. The Court also held open the possibility of further evidentiary hearings, should the DoJ's next round of pleadings be similarly insufficient. We hope that the Court's rejection of DoJ's request for a merger rubber stamp will also put the government on notice that only a thorough and complete review of the pending AT&T/BellSouth merger will withstand judicial scrutiny."

In late 2005, the Federal Communications Commission (FCC) and Department of Justice (DoJ) approved the mergers of SBC/AT&T and Verizon/MCI, creating the two largest telecommunications companies in the country. Notwithstanding the significant geographic and product market overlaps between the two sets of merger partners, the DoJ approved the mergers without imposing meaningful conditions.

The mergers are being challenged in federal court pursuant to the so-called Tunney Act, which requires the federal court to determine whether a proposed antitrust settlement is in the "public interest."