AT&T and TCI cleared the last major hurdles in their proposed US$48 billion merger, which will create a one-stop shop for phone service, Internet access, and cable television.
On Wednesday, the deal won approval from the Federal Communications Commission and shareholders of both companies.
AT&T's planned purchase of TCI, the No. 2 cable television company, is expected to close shortly. The deal already received Justice Department approval, but still faces scrutiny from a few municipalities and the state of California.
Together, AT&T and TCI will offer long-distance and cellular phone service, cable television, and high-speed Internet access. AT&T, the No. 1 US long-distance company, also plans to provide local phone service over TCI's cable TV wires.
Shareholders of New York-based AT&T and Englewood, Colorado-based TCI approved the deal in separate meetings near the companies' headquarters. The deal will end a quarter century of independence for TCI.
"It's been a hell of a run," TCI chairman John Malone told shareholders at a special meeting.
The FCC, meanwhile, approved the deal without requiring the companies to meet certain concessions sought by their rivals. Some Internet companies had urged regulators to require AT&T and TCI to grant open access to their high-speed Internet service to competitors.
AT&T said about 99 percent of the shares that were voted approved the merger. More than 72 percent of the outstanding shares cast a favorable vote, the highest level ever recorded for a company proposal in AT&T's history.
The TCI (TCOMA) purchase and proposed joint ventures with other cable companies will allow AT&T (T) to provide local phone service over cable TV wires instead of traditional copper-wire phone networks.
Since the break-up of AT&T and the creation of the Baby Bell local phone companies in 1984, AT&T has lost control of the local phone lines that connect directly into customers' homes and businesses.
Using cable TV wires to provide phone service, AT&T can bypass the Baby Bell's phone lines -- and the costly access charges -- to reach customers.
FCC officials hope the deal will finally create substantial competition for the regional Bell companies that so far have had a stranglehold on the residential local phone market.
The merger "is likely to result in benefits for consumers, including a local telephony alternative for many residential customers now served only by incumbent local exchange companies, without creating competitive harm with respect to other services," the FCC said.
FCC approval followed a similar move by the Justice Department, which approved the transaction as long as the companies sold off TCI's wireless telephone assets.
