Government regulators on Monday approved SBC Communications' (SBC) takeover of AT&T (T)and Verizon Communications' (VZ) purchase of MCI (MCIP), removing the final federal hurdle for the multibillion-dollar deals.

By 4-0 votes, the Federal Communications Commission (search) said yes to the mergers but added several conditions. Among them, it required that SBC and Verizon freeze the wholesale prices they charge competitors to lease high-capacity business lines and to guarantee that they will sell their Internet access as a stand-alone service so customers aren't forced to buy local phone service as well.

Several state regulatory agencies still must sign off on the deals.

SBC's acquisition of AT&T (search) is valued at $16 billion; the Verizon-MCI deal is said to be worth about $8.5 billion.

The FCC approval came after a weekend of negotiations. The commission had scheduled a vote for last Friday at the agency's monthly meeting, but then postponed it to continue talks.

The Justice Department cleared the mergers last week, with more limited conditions than those placed on the companies by the FCC. Critics of the deals had complained that asset sales in overlapping areas were needed to ensure healthy competition in the industry, but federal regulators declined to approve selloffs for either company.

Justice Department approval was contingent on Verizon (search) and SBC leasing to rivals high-capacity lines serving business customers in 19 metropolitan areas, including Washington, Boston, New York, Chicago, Detroit, Los Angeles and St. Louis.

AT&T Corp. and MCI Inc. dominate the market for business customers, and the mergers would enhance the base of business customers for the regional Bell companies, Verizon and SBC. The deals would also expand their national and international presence.

Consumer advocates and Bell rivals have complained that the competition for the Bells that AT&T and MCI would have provided in many markets would be virtually eliminated by the mergers — meaning limited choices for consumers and higher prices.

SBC expects its merger to close by the end of the year; Verizon expects to close by late this year, or early next year.

After SBC completes its merger, the San Antonio based company plans to change its corporate name to the more recognizable AT&T.

New York-based Verizon will keep its corporate name.