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FCC Chairman Tries To Push Forward AT&T-BellSouth Deal
By Amy Schatz
The Wall Street Journal
Saturday, December 2, 2006


Federal Communications Commission chairman Kevin Martin set the wheels in motion late Friday to compel a Republican commissioner to vote on the pending merger of AT&T Inc. and BellSouth Corp., which has hit an impasse over potential merger conditions.

Republican commissioner Robert McDowell had expressed concerns about possible conflict-of-interest issues because his former employer, an interest group representing small phone companies, has opposed the merger.  The five-member FCC, which has three Republicans and two Democrats, has been unable to reach agreement on the merger without Mr. McDowell, who might cast the deciding vote.

Friday afternoon, Mr. Martin directed the FCC's general counsel to review whether Mr. McDowell should be allowed to vote on the deal.  That review will take days, not weeks, according to an FCC official close to the negotiations.  "It just became clear than an impasse was reached" in negotiations between Mr. Martin and the FCC's two Democrats, an FCC official said.  The chairman sent a letter to Congressional leaders informing them of his decision.

In a statement, Mr. McDowell pointedly did not say he was not yet prepared to vote on the deal, saying only that he had received a copy of the chairman's letter and that he looks forward to receiving the general counsel's analysis regarding his potential participation.

The FCC's two Democratic members want a series of conditions to be placed on the deal, including guarantees about non-discriminatory Internet access and rate caps on high-volume data lines used by large business customers.  Mr. Martin originally advocated no conditions to be placed on the deal although later suggested AT&T divest a few business customers in BellSouth's region.

Write to Amy Schatz at Amy.Schatz@wsj.com

http://online.wsj.com/article/SB116501612881738550.html?mod=home_whats_news_us