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Shares of AT&T (T) - Get AT&T Inc. Report and BellSouth (BLS) hit a new high Friday on news that the pending merger is moving toward completion without any flak from regulators.

Kevin Martin, chairman of the Federal Communications Commission, is pushing for the agency to unconditionally approve the $78 billion deal, according to

The Wall Street Journal

. The FCC is scheduled to vote on the merger Oct. 12.

An FCC representative declined to comment on any aspect of the merger.

Ma Bell struck the deal to acquire Atlanta telco BellSouth in March, shortly after the new AT&T was formed in a mega-merger of San Antonio phone giant SBC and AT&T, the nation's top long-distance company.

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The Justice Department must yet approve the combination.

Critics have charged that the Bells have benefited on the regulatory front from their cozy ties to Washington. This close partnership between big phone and government drew extra

scrutiny from consumer-protection and privacy watchdogs in the wake of the domestic spying practices of the National Security Agency.

The apparent lack of divestiture requirements and other conditions to the deal is seen as a green light by Wall Street.

AT&T and BellSouth are expected achieve so-called synergies as the two operations combine. AT&T also says it plans to drop the Cingular name on its joint wireless venture with BellSouth.

AT&T shares rose 64 cents to $32.92 and BellSouth rose 92 cents to $43.35 in midday trading Friday.