LA CELL FIRM SALE ORDERED BELLSOUTH, SBC PLAN JOINT WIRELESS VENTURE.

Byline: Staff and Wire Services

BellSouth Corp. has until mid-December to sell its 51 percent stake in LA Cellular, in order to win Justice Department approval for its joint venture with SBC Communications.

If approved by federal regulators, the deal would create the nation's second-largest wireless telephone service.

Both companies agreed Wednesday to divest themselves of wireless businesses in 16 markets, including Los Angeles, Indianapolis and New Orleans, in an effort to win government approval.

``We have until Dec. 18 to sell our stake in LA Cellular,'' said Jeff Battcher, a spokesman with Atlanta-based BellSouth. ``In Los Angeles, our cell phone business interests are held jointly with and offered by AT&T.''

``We have a similar deal with them in Houston,'' he said.

Selim Bingol, a spokesman with San Antonio-based SBC, said wireless customers in Los Angeles who have contracts with their Pacific Bell subsidiary will not be affected by the transaction.

At the same time the companies announced their plans Wednesday, the department filed a lawsuit to block the deal and an agreement with the companies that would settle that lawsuit, if, as expected, the agreement is approved by the U.S. District Court.

``Today's action by the department ensures that this joint venture will not reduce competition in these local markets,'' said Assistant Attorney General Joel I. Klein, head of the department's antitrust division. ``Without the divestitures required by this consent decree, wireless customers in 16 markets, large and small, would have had fewer choices and faced the risk of higher prices and lower quality service.''

The government's lawsuit alleged that the original deal would have significantly reduced competition in those markets for wireless mobile telephone service by eliminating head-to-head competition between SBC and BellSouth's wireless units.

The proposed consent decree would ensure that the joint venture would not increase concentration in any geographic market, the department said.

The venture, still subject to Federal Communications Commission approval, would create a domestic wireless business with more than 18 million customers, second only to Verizon Communications.

``This approval is a major step toward the launch of a world-class national wireless company,'' said Stephen Carter, president and chief executive officer of the joint venture company. The businesses expect no problems in completing the divestitures within the allotted time.

The companies agreed to sell their interest in one of the two overlapping wireless businesses they own either in whole or in part in the 16 markets, which together have more than 20 million residents.

The markets include nine of the 306 Metropolitan Statistical Areas in the country, which are used by the Federal Communications Commission to license urban cell phone systems, and seven of the 428 Rural Service Areas defined for licensing rural cellular systems.

The nine urban systems to be sold are in Los Angeles; New Orleans and Baton Rouge, La.; and Indianapolis, Anderson, Bloomington, Lafayette, Muncie and Terre Haute, Ind. The rural systems are in Iberville, St. James and Plaquemines parishes, La., and Warren, Owen, Brown and Decatur counties, Ind.

SBC provides local telephone service in 13 states.

It also provides mobile cell phone or other wireless mobile phone service in all of those states, except Nevada, as well as in some areas outside its local service region, including Washington, D.C., and parts of Delaware, Hawaii, Kentucky, Louisiana, Maryland, Massachusetts, New Jersey, New York, Pennsylvania, Rhode Island, Virginia and West Virginia.

SBC is the nation's third-largest wireless mobile phone provider with more than 12.2 million subscribers nationwide and 1999 revenues of more than $49 billion.

BellSouth provides local phone service in nine states. It also provides cell phone service in these and some other states. A major wireless provider, BellSouth has more than 5.9 million subscribers nationwide and reported 1999 revenues of more than $25 billion.