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SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
Form 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report: July 15, 1994
AT&T Corp.
A New York Commission File I.R.S. Employer
Corporation No. 1-1105 No. 13-4924710
32 Avenue of the Americas, New York, New York 10013-2412
Telephone Number (212) 387-5400
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Form 8-K AT&T Corp.
July 15, 1994
Item 5. Other Events.
MCCAW CELLULAR COMMUNICATIONS, INC. ("McCaw"). In August 1993,
AT&T and McCaw entered into a definitive agreement to merge McCaw and a
subsidiary of AT&T, making McCaw a wholly owned subsidiary of AT&T (the
"Merger"). The Merger is subject to a number of conditions, including the
receipt of regulatory approvals, expiration of the waiting period under the
Hart-Scott-Rodino Antitrust Improvements Act (the "HSR Act"), receipt of
opinions that the Merger will be tax free and will be accounted for as a
pooling of interests, and McCaw stockholder approval. The McCaw
stockholders have approved the Merger.
(a) HSR Act Approval. AT&T and McCaw must observe the
notification and waiting period requirements of the HSR Act before the
Merger may be consummated. The HSR Act provides for an initial 30 calendar
day waiting period following the filing with the Federal Trade Commission
(the "FTC") and the Antitrust Division of the U.S. Department of Justice
(the "Antitrust Division") of certain notification and report forms by the
parties to the Merger and certain other parties.
Following the requisite filings under the HSR Act, AT&T and McCaw
each received an extensive request from the Antitrust Division for
additional information and documents with respect to the Merger and the
telecommunications industry. Accordingly, the waiting period under the HSR
Act was extended, and each of AT&T and McCaw has been responding to the
requests. The FTC and the Antitrust Division frequently scrutinize the
legality under the antitrust laws of transactions such as the Merger.
On July 15, 1994, AT&T, McCaw and the Antitrust Division entered
into a proposed antitrust consent decree (the "Proposed '94 Consent
Decree") which would permit the Merger by settling a suit challenging the
Merger filed the same day by the Antitrust Division. The Proposed '94
Consent Decree requires approval of the U.S. District Court for the
District of Columbia . Under the Proposed '94 Consent Decree, AT&T and
McCaw agreed to several conditions on the future operations of AT&T and of
McCaw. Some of these conditions include: (i) the maintenance by AT&T of
McCaw (and McCaw affiliates) as a separate business entity in the area of
wireless systems and the provision of local wireless services; (ii) each
McCaw cellular system shall on a phased-in basis and within 21 months of
the execution of the Proposed '94 Consent Decree cease providing
interexchange services and, following certain rules, provide customers of
each McCaw cellular system equal access to any interexchange carrier that
offers service to the system; (iii) restriction of the flow of non-public
information between McCaw and AT&T in certain circumstances, particularly
in the area of manufacturing; (iv) requirements that each McCaw cellular
system provide to all interexchange carriers access on an unbundled basis
that is equal in type, quality, and price to that provided to AT&T; (v)
each of AT&T and McCaw may not sell services at a price, term or discount
that depends on whether the customer uses both AT&T and McCaw's services;
and (vi) AT&T may not discriminate against unaffiliated cellular
infrastructure equipment customers in areas such as technical support,
maintenance and upgrades of equipment.
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Form 8-K AT&T Corp.
July 15, 1994
The requirements of the Antitrust Procedures and Penalties Act,
15 U.S.C. Section 16, must be complied with before the Proposed '94 Consent
Decree is filed and entered by the Court. These requirements include: (i)
publication of the Proposed '94 Consent Decree and a competitive impact
statement in the Federal Register at least 60 days prior to the effective
date of the decree; (ii) an opportunity for the public to provide written
comments and an opportunity for the Antitrust Division to reply to such
comments; and (iii) a determination by the court that the proposed consent
decree is in the public interest.
The parties to the Proposed '94 Consent Decree have stipulated
that the Antitrust Division may withdraw its consent at any time prior to
entry of the decree.
(b) Waiver of the Antitrust Consent Decree Entered into by AT&T
in 1982 (the "'82 Consent Decree"). On April 5, 1994, the U.S. District
Court for the District of Columbia, acting on a motion filed by BellSouth
Corporation on December 2, 1993, ruled that AT&T's acquisition, under the
proposed Merger, of the interests owned by McCaw in certain cellular
properties controlled by Bell Operating Companies ("BOCs") would violate
the '82 Consent Decree. The court determined that AT&T must seek a waiver
of the '82 Consent Decree to proceed with the Merger, and that the record
before the court was insufficient to support a waiver previously requested
by AT&T. Accordingly, the court declined to grant such a waiver without
prejudice to a renewed request by AT&T, and noted that its ruling does not
absolutely foreclose the waiver. Rather, the court held that AT&T must
satisfy the legal standard for a waiver of the '82 Consent Decree.
On May 31, 1994, AT&T filed for a waiver of the '82 Consent
Decree to permit the Merger. Several parties, have filed responses with
the court requesting that various conditions be imposed on any waiver
granted to AT&T, or opposing the request for a waiver. The Antitrust
Division has filed with the court supporting AT&T's request for the waiver
subject to certain conditions on AT&T and on McCaw with respect to those
cellular properties controlled by the BOCs in which McCaw has an ownership
interest. There can be no assurance as to whether the court will grant the
waiver, or if granted, when that will occur.
(c) Federal Communications Commission ("FCC") Approval. In
August 1993, AT&T and Craig O. McCaw filed various applications seeking
consent of the FCC to the proposed transfer of control of McCaw to AT&T,
which consent is required prior to consummation of the Merger. Several
parties, including competitors of McCaw and/or AT&T, have filed petitions
with the FCC opposing the request for FCC consent or seeking to impose
conditions on the Merger. The FCC established a pleading cycle which was
completed on January 18, 1994, and the applications are pending decision by
the FCC. In May 1994, the FCC established another pleading cycle which
permitted review of certain of the documents filed by AT&T and McCaw under
the HSR Act proceeding, and under which further comments and replies were
filed. That pleading cycle was completed on July 1, 1994. The matter is
still pending before the FCC.
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Form 8-K AT&T Corp.
July 15, 1994
(d) State Regulatory Approval. Pursuant to requirements of
various statutes, AT&T and McCaw filed applications with nine state
regulatory commissions seeking approval and/or a statement of nonopposition
to the Merger. Such applications have been granted in all nine states.
There can be no assurance that the court or regulatory actions
requested by AT&T will be granted or granted without unacceptable
conditions, or that other challenges to the Merger will not be made on
antitrust grounds. The Antitrust Division could challenge the Merger
before or after it is consummated if the Proposed '94 Consent Decree is not
approved by the court or if the Antitrust Division decides to withdraw its
consent prior to court approval. If the Merger is not consummated by
September 30, 1994, the Merger agreement may be terminated by AT&T or
McCaw.
AT&T is not required to consummate the Merger if any court or
governmental or regulatory authority of competent jurisdiction enjoins the
Merger or imposes any condition or restriction on its consummation
unacceptable to AT&T in its reasonable judgment.
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Form 8-K AT&T Corp.
July 15, 1994
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf
by the undersigned thereunto duly authorized.
AT&T Corp.
By S. L. Prendergast
Vice President and Treasurer
August 1, 1994
