FCC chairman moves to end AT&T-BellSouth impasse

[Reuters]

U.S. Federal Communications Commission Chairman Kevin Martin has sought a ruling that could permit a recused commissioner to cast a tie-breaking vote allowing AT&T to acquire BellSouth, an agency official told Reuters on Friday.

FCC Commissioner Robert McDowell, a Republican, previously worked for an association that represents telephone companies competing with AT&T and BellSouth. As a result, McDowell had said he did not plan to vote on the transaction.

Martin and fellow Republican Commissioner Deborah Taylor Tate have tried to reach a compromise with the two Democratic commissioners, Jonathan Adelstein and Michael Copps, on possible conditions to attach to any approval.

Citing an impasse in the negotiations, the FCC official said Martin asked the agency's general counsel Sam Feder to rule on whether the government's interests would be served by authorizing McDowell to vote on the $82.2 billion deal.

"I look forward to receiving the general counsel's analysis regarding my potential participation," McDowell said in a statement. It was not immediately clear how quickly Feder could rule.

If McDowell were permitted to vote, he could also decide to abstain.

Representatives for Copps and Adelstein were not immediately available for comment. The agency has been reviewing the transaction for more than seven months.

"It's unfortunate, but after months of intense effort on our part, we remain at an impasse," said Jim Cicconi, AT&T senior executive vice president of external and legislative affairs.

Martin has put off three public votes on the transaction because of disagreements among the four commissioners. There is a public FCC meeting scheduled for December 20 where a vote could occur.

In recent days, conditions AT&T officials have discussed with the FCC have included an arbitration process to resolve disputes over rates for competitors to lease lines as well as prioritizing Internet content from providers who pay a fee, according to agency filings.

Democrats have raised concerns about Internet providers charging more for certain content, an issue that has been dubbed "Net neutrality." McDowell, in the past, has questioned the need for FCC action when there have been no reports of problems.

The deal has already won approval from U.S. antitrust authorities and state regulators. It would cement AT&T's position as the nation's largest telecommunications provider.

McDowell would likely have to read the draft order to approve the deal and conduct meetings with the various parties--which could take time.

"Even if Mr. McDowell is engaged, we acknowledge that significant uncertainties remain about the tight timetable and the conditions that would be applied to the transaction, creating some possibility the proceeding could extend into January and cause AT&T-BellSouth angst," analysts at Stifel, Nicolaus & Co. said in a note to clients.

Martin sent a letter on Friday to the leaders of the House and Senate commerce committees informing them of his plans. Democrats take control of Congress next year and could call hearings to review the agency's handling of the matter.

article originally published at http://news.zdnet.com/2102-1035_22-6140263.html.

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