*Pages 1--3 from * David G. Cartwright SBC Telecommunications Inc. Director – Federal Regulatory 1401 I Street NW, Suite 400 Washington, D. C. 20005 Phone: (202) 326- 8894 Fax: (202) 789- 5319 July 7, 2004 Ms. Diana Lee Investigations and Hearings Division Enforcement Bureau Federal Communications Commission 445 Twelfth Street, S. W.; 6C- 326 Washington D. C. 20554 Re: Applications of Ameritech Corp., Transferor, and SBC Communications, Inc., Transferee, For Consent to Transfer of Control of Corporations Holding Commission Licenses and Lines Pursuant to Section 214 and 310( d) of the Communications Act and Parts 5, 22, 24, 25, 63, 90, 95, and 101 of the Commission’s Rules (CC Docket No. 98- 141)— Post Merger Audit Requirements Dear Ms. Lee: Per your request, I have provided additional information regarding the conditions that sunset after May 31, 2004. Please see “Additional Notes to Table 2” below. On June 7, 2004, SBC sent a letter to Mr. William Davenport requesting that the Commission discontinue requiring SBC to obtain SBC/ Ameritech post- merger compliance audits for the years beginning on or after January 1, 2004. 1 In the letter, SBC stated there is no productive reason for the Commission or SBC to devote their resources to further audits since most of the merger conditions sunset prior to January 1, 2004. As of May 31, 2004, only eight merger conditions, exclusive of the five administrative conditions, had not sunset. These eight remaining operative conditions primarily require SBC to maintain an existing obligation and do not impose any prospective obligations yet to be achieved and audited. Also, SBC will continue to file annual merger reports on March 15, describing SBC’s compliance with the remaining merger conditions. This report will allow the Commission and others to confirm SBC’s compliance with the merger conditions, without expending costly and time consuming resources necessary for an independent audit. SBC estimates the merger condition audits for the years 2004 and beyond would cost at least one million dollars, above and beyond the time and resources that would be expended by SBC and Commission personnel to support and review the audits. Obviously, the financial and operation burdens of additional audits outweigh any possible benefits of continued audits of previously achieved compliance obligations. 1 See Letter from Jim Lamoureux, Senior Counsel, SBC Telecommunications, Inc., to William Davenport, Chief, Investigations and Hearings Division, Enforcement Bureau, Federal Communications Commission, dated June 7, 2004. 1 Diana Lee Page 2 of 3 July 6, 2004 If you have any questions, please do not hesitate to contact me at (202) 326- 8894. Sincerely, cc: William Davenport Peter Young Table 1 SBC/ Ameritech Merger Conditions that have Sunset through June 1, 2004 Condition Number SBC/ Ameritech Merger Condition Sunset Year 1 Separate Affiliate for Advanced Services 2003 2 Discounted Surrogate Line Sharing Charges 2000 4 Access to Loop Information for Advanced Services 2003 5 Loop Conditioning Charges and Cost Studies 2002 7 Carrier- to- Carrier Performance Plan 2004 - Compliance for 2004 included in scope of 2003 compliance audit. 9 Restructuring OSS Charges 2002 10 OSS Assistance to Qualifying CLECs 2002 11 Collocation Compliance 2002 12 Most- Favored- Nation Provisions for Out- of- Region and In- Region Arrangements 2002 13 Multi- state Interconnection and Resale Agreements 2002 17 Offering of UNEs 2003 18 Alternative Dispute Resolution through Mediation 2002 20 Access to Cabling in Multi- Unit Properties 2002 21 Out- of- Territory Competitive Entry 2002 22 InterLATA Services Pricing 2004 – Compliance for 2004 included in scope of 2003 compliance audit. 24 Additional Service Quality Reporting 2002 25 NRIC Participation 2002 2 Diana Lee Page 3 of 3 July 6, 2004 Table 2 SBC/ Ameritech Merger Conditions that Sunset after May 31, 2004 Condition Number SBC/ Ameritech Merger Condition Sunset Year 3 Advanced Services OSS 2005 - Complete after SBC East sunsets August 2005. 6 Non- discriminatory Rollout of xDSL Services 2005 - Complete after Indiana Urban sunsets January 2005. 8 Uniform and Enhanced OSS 2003 – The Company must provide access to the OSS enhancements and additional interfaces for 36 months after they were deployed. 14 Unbundled Loop Discount 2003 - The Company remains obligated to discount loops ordered pursuant to this offering for 36 months for qualifying loops. 15 Resale Discount 2002 - The Company remains obligated to provide the promotional discount ordered prior to the sunset of the offer for 36 months. 16 UNE Platform 2002- The Company remains obligated to provide the promotional UNE platform for 36 months from date of installation . 19 Shared Transferred in Ameritech States To be determined. 23 Enhanced Lifeline Plans 2004 – Complete after Arkansas sunsets in August 2004. All other states sunset before May 2004. Additional notes to Table 2 Condition 3 – Sunsets in all other states on October 22, 2004. Condition 6 - Sunsets in all other states on or before the end of May 2004. Condition 8 – SBC East sunsets August 7, 2005. Sunsets in all other states on April 24, 2005. Condition 14 - Offer window sunsets in the last states in November 2003, but loops ordered under the condition receive the discount for 36 months. Consequently the number of loops receiving the discount will decline incrementally to zero in November 2006 as loops are disconnected or have received the discount for 36 months. Condition 15 – Offer window sunset in November 2002 but lines ordered under the condition receive the discount for 36 months Consequently, the number of lines receiving the discount will decline incrementally to zero in November 2005 as lines are disconnected or have received the discount for 36 months. Condition 16 - Last lines under this condition sunset November 8, 2005. 3