In what would be the second-largest merger in history, SBC Communications Inc. has agreed to buy Ameritech Corporation. The new company, called SBC, would control one-third of the nation's phone wires. Following a background report, Jim Lehrer and guests discuss the deal and what it means for consumers.

KWAME HOLMAN: The recent spate of announcements of giant mergers continued today--this Time in the world of telecommunications. SBC, formerly known as Southwestern Bell, said it will purchase Ameritech Corporation in a $62 billion stock deal. If approved, it would be the second-largest merger ever.

RICHARD NOTEBAERT, CEO of Ameritech: When we looked at this together, there's a perfect fit, just a perfect fit. And I think customers will appreciate the ability to make one call and get service anywhere domestically within the United States, as well as internationally.

KWAME HOLMAN: SBC--based in San Antonio--is one of the fastest growing of the local phone companies, dubbed the Baby Bells after the phone system was broken up in 1984. Within the last two years, SBC purchased West Coast Baby Bell Pacific Telesis for $16.5 billion and another Baby Bell--Southern New England Telecommunications Corporation--for $5 billion. It now serves the West Coast, Southwest, and New England--providing local phone, cellular, and Internet services. SBC also is involved in telecommunications services in South Africa and Europe. Ameritech is another of the original Baby Bells. It's based in Chicago and provides the local phone service in Illinois, Indiana, Ohio, and Wisconsin. Ameritech also offers cellular phone services and has interests in telecommunications ventures in Europe.

The combination of Ameritech and SBC will carry SBC's name, employ more than 190,000 people, and control 57 million phone lines, nearly one third of the nation's total. SBC made its merger moves in the environment created by President Clinton's signing of the 1996 Telecommunications Reform Act. Since then, the number of regional phone companies has gone from seven to four, if this latest merger succeeds. They are: US West, Bell South, Bell Atlantic-- itself the result of a merger with New York Nynex--and finally the combined SBC and Ameritech. Before today's merger becomes final, it must be approved by shareholders in the two companies, the Federal Communications Commission, the Justice Department, and a number of state regulatory agencies.