BUSINESS NOTES.

PHONE DEAL IN TROUBLE: British Telecommunications PLC rattled Wall Street by seeking a cheaper price for mega-merger partner MCI Communications Corp., sending MCI's stock price into a tailspin.

Even as the corporations haggled Thursday, Federal Communications Commission officials unanimously approved the deal to merge, eliminating the last major government barrier to a proposal valued last fall at nearly $21 billion.

Merger plans have been clouded ever since MCI warned last month it would lose $800 million because of competition with regional phone companies. British Telecom investors immediately began clamoring for a better price, and analysts predicted Thursday they can probably get one.

?13Associated Press

FED BACKS BANK DEREGULATION: The nation's central bank acted to sweep away the last regulatory barriers separating banks from their securities businesses, saying the risks were manageable.

The Federal Reserve Board issued a final rule Thursday eliminating the remaining restrictions, known as ``firewalls.'' The action capped a process in recent years in which regulators have been allowing banks to get into other financial businesses on a piecemeal basis.

The securities industry's lobbying group criticized the Fed's action as ``piecemeal,'' saying it does not provide ``long-term solutions to the antiquated (laws) regulating the financial services industry'' and that congressional action is needed.

?13Associated Press

CHECK CASHERS GOUGE CUSTOMERS: Many low-income Americans, forced by rising bank fees to turn to neighborhood check cashers, are being gouged by those businesses for cashing checks and getting short-term loans, a consumer group said Thursday.

The Consumer Federation of America, which surveyed 111 check-cashing outlets in 23 of the nation's largest urban areas, found that fees for cashing a paycheck averaged 2.34 percent. Fees for personal checks averaged 9.36 percent.

Some operations also make loans at interest rates equivalent to 261 percent to 913 percent a year, according to the survey released Thursday. A spokesman for the National Check Cashers Association had no immediate comment.

?13Associated Press

AMA BACKS OUT OF ENDORSEMENT DEAL: The American Medical Association said it had made ``errors in judgment'' and renounced its exclusive deal to endorse Sunbeam Corp. health care products after a public outcry against the agreement.

AMA officials said Thursday that the Chicago-based doctors group would ask Sunbeam to release it from an agreement to place the AMA logo on products in return for a percentage of sales.

But Sunbeam's chairman, Albert J. Dunlap, said his company has a ``contract with the AMA, which we are prepared to honor, and we expect them to honor it as well.''

?13Associated Press

COURT OKS RELEASE OF TRANSCRIPTS: A California appeals court Thursday cleared the release of grand jury transcripts of a probe into Merrill Lynch & Co.'s role in Orange County's 1994 bankruptcy, but allowed time for an appeal.

The court denied a request by the brokerage to overturn a lower court's order to release the material, but said it would stay release of the thousands of pages until Tuesday to allow for appeals to the California Supreme Court.

Merrill Lynch, a chief broker and adviser to county officials, has denied any wrongdoing in the nation's biggest municipal bankruptcy. Several of its employees testified before the grand jury as prosecutors investigated the fiasco. The company is defending itself against a $2 billion civil suit by the county.

?13Associated Press