WASHINGTON-The chief executive officers of Ameritech Corp. and SBC Communications Inc. agreed last week to FCC Chairman William Kennard’s request for a 90-day negotiation period to craft Federal Communications Commission conditions for the approval of their merger.
The negotiations may be hampered, however, by a protest issued by Rep. Billy Tauzin (R-La.), chairman of the House telecom subcommittee. The FCC may be going beyond its authority in requiring the negotiations, Tauzin said in a letter to Kennard, dated April 8. “I was intrigued to receive a copy of your letter to [SBC/Ameritech] … I am further concerned that your desire to craft conditions on this merger go beyond the [FCC’s] legal authority and raise fundamental questions of fairness to these merging parties,” he said.
The merger was approved last month by the Department of Justice with the only condition being that the companies divest themselves of overlapping wireless markets. Ameritech began this process last week when it sold some of its properties to GTE Corp.
The agreement by SBC/Ameritech came one day after the two companies received a letter from FCC Commissioner Harold Furchtgott-Roth questioning the process Kennard had called for. Only the commission as a whole and not just the chairman can develop such a plan, said Furchtgott-Roth.
A proposed outline contained in Kennard’s April 1 letter calls for a decision on the merger by the end of June. The schedule includes a public forum later this month to include FCC staff and SBC/Ameritech representatives reporting on the status of discussions and any conditions placed on the merger. Public-interest representatives then could comment at the forum on the tentative conditions and propose additional ones. All other meetings would be subject to FCC notification rules.
The companies said in the agreement letter that no other telecommunications merger had been subjected to the kind of review Kennard proposed. Furchtgott-Roth said this was due to the “wholly ad hoc nature of the license review process … Simply stated, it is impossible that you or any other party could have divined in advance the concerns and implied standards that Chairman Kennard now raises, nearly a year after the submission of your application.”
