However, just as the European Commission did when it approved the deal in May, the DOJ tacked on a few conditions for its approval, including requiring the combined company to increase the amount of information it provides to the department. The DOJ's antitrust attorneys will use the data provided by Concert to detect discrimination against rival carriers and to support any complaints U.S. carriers might make to U.S. and U.K. regulatory agencies, the agency said in a statement.

The Justice Department also asked federal courts to modify and extend the existing 1994 settlement -- which allowed U.K.-based BT to acquire a 20% stake in MCI -- to take into account the full integration of BT and MCI. The 1994 settlement was set up to make sure that BT's stake in MCI wouldn't result in anticompetitive behavior, thus increasing prices for phone services.

In addition, the DOJ's proposal extends the time period of the existing decree and enhances the department's ability to monitor and enforce compliance with the decree by naming Concert as a party to the accord, giving the agency access to Concert's documents and personnel.

BT and MCI said in a joint statement that they "remain confident" the merger can be completed this fall. The deal, announced last November and considered the largest foreign investment in the U.S. ever, still must be approved by the Federal Communications Commission. During its review of the deal, the DOJ considered whether the combined company could deter or delay the entry of new competitors on the U.S.-U.K route by refusing to make available facilities such as trans-Atlantic cable.

European regulators approving the deal required BT to divest itself from any overlapping cable capacity it obtains as a result of the takeover, so the DOJ saw no need for further safeguards in that area.