WASHINGTON (Reuters)—A U.S. judge Wednesday said he had doubts about government settlements reached last year that permitted SBC Communications to buy AT&T, and Verizon Communications to acquire MCI Inc. to proceed.
U.S. District Judge Emmet Sullivan said at a hearing that the Justice Department would have to demonstrate that the antitrust settlements reached with the companies went far enough to resolve concerns about competition.
“I have doubts about that,” he said at the beginning of a hearing. “So I need to have the parties address that.”
The hearing was convened under a federal law that requires antitrust settlements be reviewed and endorsed by a judge.
Those reviews traditionally have been perfunctory, however Congress modified the antitrust laws in 2004 giving judges more leeway to examine settlements more closely.
Sullivan questioned a lawyer for the Justice Department about exactly what the court’s role should be in the review process. He also indicated he intends to have experts testify independently about the effectiveness of the settlements.
“I have a great deal of discretion,” the judge said.
The government’s lawyer told Sullivan that the department had painstakingly reviewed the transactions, spent eight months and 24,000 hours of staff time while conducting 300 interviews to investigate any possible competition concerns.
An attorney representing the Justice Department, Claude Scott, told Sullivan that the government’s consent decrees leave “a vibrant market where there are a lot of competitors out there.”
The Justice Department’s antitrust division in October 2005 agreed to allow the two large deals to go forward on the condition that they lease competitors’ access to telecommunications lines in more than 350 buildings located in each of the companies’ territories.
SBC renamed the company AT&T Inc. and is the largest U.S. telephone company. Verizon as the second-largest telecommunications company.