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Tuesday, March 30, 1999 Published at 11:26 GMT 12:26 UK

Business: The Company File

BT and AT&T clear regulator

BT head office plans to be centre of telecoms' Internet future

The European Commission has cleared the way for the proposed $10bn (£6bn) trans-Atlantic telecoms alliance between British Telecom and US giant AT&T.

"Certain coordination issues in the UK had been resolved through undertakings submitted by AT&T," the Commission said in a statement.

AT&T has agreed to sell its British long-distance subsidiary ACC UK and establish "greater structural separation" with Telewest, the UK's second-largest cable operator, in which AT&T will have 22% stake after its takeover of TCI Communications.

The deal will see the two integrate much of their international activities in a joint-venture to provide the latest telecoms technology to multinational companies and other service providers.

Internet transmission

The two companies said the 50-50 venture would be centred around the Internet and the creation of $1bn voice and data transmission network connecting 100 major cities around the world.

US regulators have still to give the deal their blessing.

The commission said after the tie-up was announced last July that it was concerned that the venture might result in an effective trans-Atlantic monopoly.

The regulator now says the alliance will control 30% to 50% of the world's telecom services including half the traffic flow between the US and the UK.

'Dynamic market'

However, "the current state of competition in these markets offered the necessary environment to enable the venture to go forward," the commission's statement said.

"This is a dynamic market, and there are a number of competitors such as MCI WorldCom, GlobalOne and Equant present on the market as well as a substantial number of potential players."

BT shares were down 13 pence at 1001p at 1512 GMT.

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