FCC could deadlock on delayed AT&T/BellSouth merger vote

[two articles]

FCC delays AT&T merger vote

by John Eggerton, Broadcasting & Cable

The FCC has pulled the AT&T/BellSouth merger from its Thursday meeting agenda.

Also gone is the planned launch of a notice of inquiry on network neutrality, the issue that has stalled telecommunications reform legislation in the Senate.

But the commission has only put off those two controversial items for a day. It has scheduled another meeting for Friday, Oct. 13, where it still plans to take up both items, though that is not a certainty either.

The Justice Department Wednesday completed its review of the proposed $67 Billion merger without seeking any conditions, concluding that there were not sufficient antitrust issues to warrant them.

The FCC could be deadlocked on the merger, with Robert McDowell not participating. That leaves two Democrats and two Republicans, with the Democrats highly critical of the DOJ decision and wanting conditions on the merger.

"We are committed to evaluating merger applications fairly and in a manner consistent with the public interest," said FCC spokesman Clyde Ensslin. "We are continuing to work to complete our AT&T and BellSouth merger review in a timely manner."

McDowell has been operating as though he will not vote. That's because his former employer, telecom lobby COMPTEL, has weighed in on the merger.

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AT&T offers concessions to get FCC OK on BellSouth

by Jeremy Pelofsky, Reuters

AT&T Inc. wants unanimous approval from the U.S. Federal Communications Commission to acquire BellSouth Corp. and has offered some concessions to the agency, a top company lawyer told Reuters on Thursday.

The FCC was scheduled to vote on the $79.3 billion acquisition on Thursday, but that was postponed until Friday while FCC Chairman Kevin Martin tried to negotiate a compromise with the two Democrat commissioners.

"We have put a full set of conditions on the table that are reasonable and protect consumers," Robert Quinn, AT&T's senior regulatory lawyer, told Reuters. "I want a deal with these guys; we want a 4-0 vote."

He declined to elaborate on the conditions offered.

While there are five FCC commissioners and the Republicans have a 3-2 majority, Republican Robert McDowell has said he does not plan to vote on the deal because he previously worked for a group that represented rivals to AT&T and BellSouth.

Martin could ask the FCC general counsel to allow McDowell to vote by arguing it would benefit the public interest, but for the moment the FCC chairman has chosen to try to hammer out a compromise with the Democrats and the companies.

The two Democratic commissioners, Jonathan Adelstein and Michael Copps, were infuriated that the Justice Department's antitrust division cleared the deal on Wednesday without any conditions, and they issued rare public statements arguing that the FCC needed to conduct a more rigorous review.

"If they seriously engage with us, we can get there," Quinn said.

Martin is due to leave for a weeklong trip to Asia during the weekend, heightening pressure to broker a deal quickly.

"We believe it remains questionable whether the four FCC commissioners involved in the proceeding will be able to agree on an order this week, which could push back action beyond next week," said analysts at Stifel, Nicolaus & Co. in a note to clients.

The firm said the Democrats could extract some targeted conditions.

"We continue to expect the FCC to approve the current deal with conditions similar to last year's relatively modest ones," it said. "We remain skeptical the Republicans or the companies, which could facilitate a compromise, will agree to sweeping new requirements."

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The media's job is to interest the public in the public interest. -John Dewey