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E-mail correspondence

    To:

    Ted Yu, Division of Corporation Finance, Securities and Exchange Commission

    From:

    Ariel Aminetzah, Sullivan & Cromwell LLP

    Sent:

    Thursday, May 19, 2005 1:50 PM

    Subject:

    SBC S-4 (File No. 333-123283) — draft response letter and changed pages

Ted,

Attached please find a draft of our response letter to the Staff’s comment letter of May 18, 2005
in connection with SBC’s S-4. In addition, attached please find the corresponding revised pages of
the S-4.

As discussed, we will call Michele Anderson at 3:30 pm this afternoon to discuss the comments and
our proposed responses.

Best regards.

Ariel Aminetzah

Sullivan & Cromwell LLP

125 Broad Street

New York, NY 10004

Tel: (212) 558-4730

Fax: (212) 558-3588

e-mail: aminetzaha@sullcrom.com

Attachments.

S&C Draft of May 19, 2005

    125 Broad Street

    New York, NY 10004-2498

    Telephone: 1-212-558-4000

    LOS ANGELES • PALO ALTO • WASHINGTON, D.C.

    Facsimile: 1-212-558-3588

    FRANKFURT • LONDON • PARIS

    WWW.SULLCROM.COM

    BEIJING • HONG KONG • TOKYO

    MELBOURNE • SYDNEY

    May [ • ], 2005

Michele M. Anderson,

     Legal Branch Chief, Division of Corporation Finance,

          Securities and Exchange Commission,

               450 Fifth Street, N.W.,

                    Washington, D.C. 20549-0510.

    Re:
    Responses to Comments on Amendment No.2 to the Registration Statement

on Form S-4 filed by SBC Communications Inc. on May 11, 2005

(File No. 333-123283)

Dear Ms. Anderson:

     SBC Communications Inc. (“SBC”) today filed Amendment No. 3 to its Registration Statement on
Form S-4 (File No. 333-123283) (“Amendment No. 3”), including a Prospectus of SBC and a Proxy
Statement of AT&T Corp. (“AT&T”). This letter, which is being submitted on behalf of SBC and AT&T,
responds to your letter, dated May 18, 2005, relating to comments of the staff (the “Staff”) of the
Securities and Exchange Commission (the “Commission”) in connection with the above-referenced
Registration Statement and certain related documents.

     The responses to the Staff’s comments are numbered to relate to the corresponding comments in
your letter of May 18, 2005. For your convenience, we have also included the text of each of your
comments. In general, the information contained in this letter with respect to SBC has been
furnished by SBC and the information contained in this letter with respect to AT&T has been
furnished by AT&T. All page references in this letter are to the pages of Amendment No. 3 in the
form filed today with the Commission.

AMENDMENT NO. 2 TO FORM S-4

Summary, page 1

    1.
    We note the disclosure that the special dividend “should qualify as a distribution
within the meaning of Section 301,” “should be treated” as a

Michele M. Anderson

May  • , 2005

Page 2 of 7

    dividend for US federal income tax purposes, and “should be taxed on the cash received
as a Special Dividend.” Please revise to phrase the opinions more definitively. If
tax counsel is using the “should” language because uncertainty exists regarding the tax
consequences or it is unable to opine on the matter, it should explain why it cannot
give a “will” opinion, describe the degree of uncertainty in the opinions, and provide
any necessary risk factor discussion. Apply similar revisions to the Material United
States Federal Income Tax Consequences section beginning on page 53 and the tax opinion
filed as Exhibit 8.2.

    In addition, please state clearly in the summary and elsewhere in the prospectus that
under a Section 368(a) reorganization, the exchange of AT&T shares for SBC shares by
AT&T shareholders will be tax-free.

    In response to the Staff’s comment, we have revised the
disclosure on pages [3] and [54] to
explain why tax counsel is unable to give a “will” opinion regarding the
characterization of the special dividend for United States federal income tax purposes,
and to address the United States federal income tax consequences to holders of AT&T
common stock if the Internal Revenue Service were to disagree with tax counsel’s
characterization. In addition, tax counsel to AT&T has revised the tax opinion filed
as Exhibit 8.2 accordingly.

    In addition, we have revised the disclosure on pages [3] and [54] to state clearly that
under a Section 368(a) reorganization, holders of AT&T common stock will not recognize
gain or loss upon the exchange of AT&T shares for SBC shares, except with respect to
any cash received in the merger.

    2.
    In order to enhance readers’ understanding of the alternative tax consequences,
please explain more clearly the meaning of the merger agreement’s provision (Section 6.18
of the merger agreement) that the parties can restructure the merger to include “in the
per share merger consideration the per share amount of the special dividend” if such
restructuring is needed in order to obtain Section 368(a) treatment. For example, your
revised disclosure should explain to readers what you mean by including “in the per share
merger consideration the per share amount of the special dividend.” Does this mean that
SBC will be deemed to pay the $1.30 per share in cash as part of the merger consideration
in lieu of AT&T paying its shareholders a cash dividend?

    Finally, your disclosure appears to be stating that if the restructuring occurs, the
merger will constitute a tax-free Section 368(a) reorganization but AT&T shareholders
may still recognize a gain (the amount of the recognized gain depending on the
circumstances described on pages 4 and 55). To enhance readers’ understanding and
avoid any confusion on the part of readers, please explain why it is consistent to
indicate that a

Michele M. Anderson

May  • , 2005

Page 3 of 7

    merger is a tax-free Section 368(a) transaction even though AT&T shareholders may be
forced to recognize gains.

    In response to the Staff’s comment, we have revised the
disclosure on pages [3] and [55] to
indicate that if the merger is restructured to include in the per share merger
consideration the per share amount of the special dividend, (1) AT&T will not pay the
special dividend and (2) each share of AT&T common stock issued and outstanding
immediately prior to the effective time of the merger will be converted into the right
to receive 0.77942 of a share of SBC common stock, plus $1.30 in cash (i.e., the merger
consideration paid by SBC will consist of shares of SBC common stock and cash).

    We advise the Staff on a supplemental basis that characterization of the merger as a
“reorganization within the meaning of Section 368(a) of the Code” is not inconsistent
with gain recognition by holders of AT&T common stock. Even if a transaction qualifies
as a reorganization for United States federal income tax purposes, a shareholder who
receives cash (or other nonqualifying consideration) in such transaction is required to
recognize gain for federal income tax purposes in an amount equal to the lesser of the
gain realized and the amount of cash (and the fair market value of other nonqualifying
consideration) received, but may not recognize any loss for federal income tax
purposes. Because holders of AT&T common stock will receive cash in the merger if the
merger is restructured to include in the per share merger consideration the per share
amount of the special dividend, holders may be forced to recognize gain. Accordingly,
we have revised the disclosure on pages [3] and [54] to state clearly that the merger will
be tax-free to holders of AT&T common stock, except with respect to any cash received.

The Merger, page 28

    3.
    We note your revisions in response to prior comment #3. We again ask that you
provide expanded information regarding the extent of any discussions between AT&T and
third parties. In this regard, you state on pages 29 and 31 that AT&T’s management made
conclusions based on the relative levels of interest expressed by other parties, but the
first paragraph on page 28 does not give any indication to the levels of interest
expressed. In addition, it is unclear how the AT&T board assumed that a potential
transaction with SBC could result in greater cost savings than in other transactions based
on those preliminary discussions. Please revise accordingly.

    In response to the Staff’s comment, we have revised the
disclosure on pages [28] and [29].

Michele M. Anderson

May •, 2005

Page 4 of 7

    4.
    The revisions made in response to our prior comment #4 appear to address more the
question of SBC’s intentions with respect to the 10%-15% premium range rather than the
question of how the range was calculated. Therefore, as previously requested by our
comment #4, please explain, with an useful level of detail, how SBC selected a range of
10%-15% for the “small” premium it was willing to pay for AT&T’s shares.

    [We would like to discuss this comment with the Staff.]

    SBC’s Reasons for the Merger, page 32

    5.
    Revise page 34 to indicate that the SBC board reviewed the third party analyses and
newspaper articles as background information and that the materials were not “of material
significance” to its consideration of the merger, as indicated in your response to prior
comment #7. We believe your current disclosure may imply that the board materially relied
on the materials.

    In response to the Staff’s comment, we have revised the disclosure on page 34 to
indicate that the SBC board of directors reviewed the publicly available third party
analyses and newspaper articles as background materials. We advise the Staff that, as
noted on page [34], the SBC board of directors did not quantify, rank or otherwise assign
relative or specific weights or values to any of the factors it considered, including
the third party analyses and newspaper articles.

Opinions of AT&T’s Financial Advisors, page 40

    6.
    We reviewed the SBC-prepared forecasts for 2005, which were provided in response to
our prior comment #10. We further note your statement that such forecasts “were not
inconsistent with the analysis that CSFB and Morgan Stanley had compiled based upon
publicly available information.” However, based on our review of the CSFB/Morgan Stanley
presentation to the AT&T board, the 2005 projections used by the financial advisors in
their analyses and based on publicly available research estimates appear to differ from
the SBC-prepared forecasts for 2005. Specifically, the SBC-prepared
forecasts of total revenues for 2005 appear to differ from the
projected total revenues for 2005 contained within the CSFB/Morgan
Stanley presentation. In your response letter, please reconcile this
discrepancy.

Michele M. Anderson

May •, 2005

Page 5 of 7

    We advise the Staff on a supplemental basis that the SBC-prepared forecasts that were
previously provided on a supplemental and confidential basis to the Staff did not
include any forecast of the revenue of Cingular. The SBC-prepared projections are
based on SBC’s GAAP accounting, pursuant to which SBC’s investment in Cingular is
accounted for under the equity method of accounting. Leaving aside the revenue of
Cingular, the SBC-prepared 2005 forecasts are not inconsistent with the 2005
projections based on publicly available research estimates that were used by the
financial advisors in their analyses.

    7.
    Although we note the explanation provided in your response to our prior comment #10,
provide us with copies of the SBC-prepared projections for 2006 and 2007 so that we can
review the projections. If you wish, you may request the return of the projections in
accordance with Rule 418(b) of Regulation C.

    Furthermore, according to your response to our prior comment #10, CSFB and Morgan
Stanley were not provided copies of SBC-prepared projections for 2006 and 2007.
Instead, they were only allowed to view the projections “briefly without taking notes.”
Yet, your disclosure in the prospectus/proxy statement continues to state that CSFB
and Morgan Stanley “reviewed...financial forecasts for 2005 through 2007 prepared and
provided to CSFB by SBC” and “reviewed certain financial projections for 2005 through
2007 prepared by the management of SBC.” Given your response indicates that neither
CSFB nor Morgan Stanley had an opportunity to review the 2006 and 2007 projections to
the same extent that they had to review the 2005 projections, your disclosure should be
revised to indicate the limited scope of their review of the 2006-2007 projections.

    In response to the Staff’s comment, we have revised the
disclosure on page [45]. In
addition, we are providing the Staff on a supplemental basis under separate cover a
copy of the SBC-prepared projections for 2006 and 2007.

    8.
    As requested by prior comment #13 of our May 6, 2005 letter and prior comment #39 of
our April 8, 2005 letter, please describe in the prospectus/proxy statement the criteria
used to select the “comparable companies” utilized in the discounted cash flow analysis.

    Include in the prospectus/proxy statement your explanation of why the financial
advisors used different companies for the discounted cash flow analysis and selected
company analysis.

    In response to the Staff’s comment, we have revised the
disclosure on pages [45] and [47].

Michele M. Anderson

May •, 2005

Page 6 of 7

The Merger Agreement, page 59

    9.
    The disclosure that the representations and warranties “may not be complete,” “may or
may not have been accurate,” and “do not purport to be accurate as of the date of this
document” is vague and may not be clear to security holders. As requested by our prior
comment #18, please include in the prospectus/proxy statement an express statement
acknowledging if specific material facts exist that contradict the representations or
warranties in the merger agreement, you have provided corrective disclosure.

    In view of the Staff’s numerous objections to the referenced paragraph and SBC’s and
AT&T’s belief that it would be inappropriate to make the requested statement regarding
“corrective disclosure,” we have revised the disclosure on page 59 to eliminate the
paragraph entirely.

    10.
    Your disclosure refers to agreements other than the merger agreement. Such
references are overly broad and may not be clear to security holders. Please revise to
omit reference to agreements other than the merger agreement.

    See response to Comment #9 above.

    11.
    You note your statement that the representations and warranties were made “only for
the purposes of such agreements” and the “benefit of the parties.” These statements
appear to limit reliance by investors on the descriptions of the representations and
warranties. Please revise to remove any potential implication that the referenced merger
agreement does not constitute public disclosure under the federal securities laws.

    See response to Comment #9 above.

Exhibits 8.1 and 8.2

    12.
    Please file the executed Wachtell and Sullivan & Cromwell tax opinions prior to
requesting effectiveness.

    The Staff’s comment has been noted and we will file the
executed tax opinions prior to requesting effectiveness.

Michele M. Anderson

May •, 2005

Page 7 of 7

*           *           *

     Please contact me at (212) 558-4801, via fax at (212) 558-3588 or via e-mail at
hamiltonb@sullcrom.com if you have any comments or questions about this letter.

    Very truly yours,

    Brian E. Hamilton

    cc:

    Wayne A. Wirtz, Esq.

    SBC Communications Inc.

    175 East Houston

    San Antonio, Texas 78205

    Robert S. Feit, Esq.

    AT&T Corp.

    One AT&T Way

    Bedminster, New Jersey 07921

    Steven A. Rosenblum, Esq.

    Stephanie J. Seligman, Esq.

    Wachtell, Lipton, Rosen & Katz

    51 West 52nd Street

    New York, New York 10019

    Benjamin F. Stapleton, Esq.

    John J. O’Brien, Esq.

    Sullivan & Cromwell LLP

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