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Lawmakers Seek Delay in AT&T-BellSouth Merger
By Siobhan Hughes
The Wall Street Journal
Friday, September 29, 2006


WASHINGTON -- A growing chorus of caution from lawmakers -- particularly Republicans -- could make it more difficult for the Federal Communications Commission and the Justice Department to finish their reviews of AT&T Inc.'s $67 billion purchase of  BellSouth Corp. by mid-October as planned.

House Judiciary Committee Chairman James Sensenbrenner (R., Wis.) and Rep. John Conyers (D., Mich.), the panel's top Democrat, wrote yesterday to the Justice Department asking to postpone the merger's antitrust review until a federal judge decides whether two prior telecommunications mergers are in the public interest.

Also, Sens. Mike DeWine (R., Ohio) and Sen. Herb Kohl (D., Wis.), the chairman and ranking Democrat on the Judiciary Committee's antitrust subcommittee, wrote asking the Justice Department and the FCC to consider imposing conditions on the merger to prevent the new company from hoarding the wireless spectrum it controls, thus keeping it out of the hands of competitors.

The senators also asked the FCC and the Justice Department to examine whether AT&T and BellSouth should divest themselves of certain facilities in BellSouth's territory, in the Southeast.

Earlier in the week, Mr. Kohl joined Sen. Patrick Leahy of Vermont, the Judiciary Committee's ranking Democrat, in writing Justice antitrust chief Thomas Barnett to complain that the agency has allowed high-profile telecommunications mergers to close before completion of congressionally mandated court reviews.

The pushback from Capitol Hill, particularly from Mr. DeWine, who is in a race to hold his Senate seat, pressures the FCC and the Justice Department to hold off approvals until the judge completes his review under the Tunney Act.

U.S. District Judge Emmet Sullivan is examining the mergers of  Verizon Communications Inc. and  MCI Inc. and the former SBC Communications Inc.'s takeover of AT&T.  New York Attorney General Eliot Spitzer and two groups representing Bell competitors have challenged the mergers, arguing Justice Department conditions put on them didn't increase competition.

"We're aware of it and will respond as appropriate," Gina Talamona, a Justice Department spokeswoman, said of the letters.  An FCC official said Chairman Kevin Martin had received the letters but declined to comment further.

Mr. Martin has circulated the merger for a vote at the FCC's Oct. 12 meeting, and the Justice Department's review was expected to be completed before then, people close to the matter say.  Mr. Martin might lack a Republican majority on the five-member FCC to approve the transaction; Commissioner Robert McDowell may recuse himself, since his previous employer, a trade group for small phone companies, opposes the deal.

---- Amy Schatz contributed to this article.

Write to Siobhan Hughes at siobhan.hughes@dowjones.com


http://online.wsj.com/article/SB115949084816977509.html?mod=hps_us_at_glance_technology