WASHINGTON, July 8: The US justice department on Monday gave British Telecommunications Plc permission to buy MCI Communications Corp, in a $24-billion deal that would be one of the biggest foreign takeovers of a US company.But the department attached conditions to the deal about two months after European regulators took similar steps to help ensure competition. The deal now awaits a ruling by the (US) Federal Communications Commission, whose officials have said they hope to complete their work by summer's end.

Shareholders of both companies have already approved the deal."MCI and BT remain confident that the merger can be completed as expected by fall," the companies said in a statement, adding that they were "very pleased the department of justice has completed its review."The new, combined company - to be called Concert - will have combined annual revenues of $43 billion from operations in 72 countries.British Telecommunications already owns 20 per cent of MCI, the nation's second largest long-distance company, a stake acquired in 1994 after US regulators placed conditions on the transfer in a court consent decree.The justice department said it would extend that decree, due to expire in 1999, to 2004, and it added more conditions."We need to make certain changes to the consent decree and extend it to ensure that US consumers continue to enjoy the lower prices and better service associated with competition on international routes," acting assistant attorney general in charge of the antitrust division Joel Klein said.

The companies said they believed the merger would foster competition -- citing, for example, a 12-cent-a-minute rate MCI initiated for calls between the United States and Britain.The new corporate parent will absorb MCI, moving the headquarters to London. MCI is based in Washington.MCI led the way in breaking up the monopoly once enjoyed by AT&T Corp, first offering competitive long-distance service for homes in 1980. It first expanded to international phone markets in 1982. AT&T was broken up by court decree in 1984.MCI and British Telecommunications announced a strategic alliance in 1993, which gave BT its 20 per cent stake in MCI.Under the conditions for the merger set by the European Union, MCI will have to take additional steps to share its underseas cables with competitors.The justice department, building on the work of the EU, also required that the British arm of the new company keep secret from its American counterpart any proprietary information it receives from US telecommunications carriers.The consent decree also gives the department access to documents within the new company and its personnel so it can assure the new company lives up to its end of the agreement.

AT&T had worried that high accounting rates and lack of equal access in Britain could impede competition between the two countries in the wake of the merger, but it cited significant progress which "should benefit competition and thus telephone users."BellSouth Corp criticised the decision and said the justice department seemed "more intent on promoting British entry into the US long-distance market than on allowing long-distance competition from the Bell companies, which employ a half-million US citizens.

"The justice department last month urged the Federal Communications Commission to reject Ameritech Corp's bid to offer long-distance service in Michigan, saying the Baby Bell had yet to fully open its local phone monopoly to competition.The department also urged the FCC to reject SBCCommunications Inc's application to offer long-distance service in Oklahoma."Allowing BT into the US long-distance market makes even more befuddling DOJ's recommendations against Ameritech and SBC applications to offer long-distance service to their customers," BellSouth said in its statement.

Copyright © 1997 Indian Express Newspapers (Bombay) Ltd.