Having Received Approval from the Justice Department and the Federal

question 73

Essay

Having received approval from the Justice Department and the Federal Trade Commission,
Ameritech and SBC Communications received permission from the Federal Communications Commission to form the nation's largest local telephone company. The FCC gave its approval of the $74 billion transaction, subject to conditions requiring that the companies open their markets to rivals and enter new markets to compete with established local phone companies. SBC had considerable difficulty in complying with its agreement with the FCC. Between December 2000 and July 2001, SBC paid the U.S. government $38.5 million for failing to provide adequately rivals with access to its network. The government noted that SBC failed repeatedly to make available its network in a timely manner, to meet installation deadlines, and to notify competitors when their orders were filled. Comment on the fairness and effectiveness of using the imposition of heavy fines to promote government-imposed outcomes, rather than free market outcomes..

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Definitions:

Budgeted Sales

Projected sales revenue, often part of a company’s financial planning process to estimate future income from sales.

Cash Disbursements

Outflows of cash for expenses, investments, and other payments made by a business.

Materials Purchases

The acquisition of raw materials or supplies required for the production of goods or provision of services.

Payment Discount

A reduction in the invoice amount offered by a seller to the buyer in return for early payment within a specified time frame.