WASHINGTON—One of the three Republicans of the five-member, GOP-controlled Federal Communications Commission has decided not to participate in the agency’s vote on the proposed $67 billion merger between AT&T Inc. and BellSouth Corp. because of a conflict of interest. The news—when combined with controversy over wireless broadband spectrum, special-access lines and other politically charged issues—could force the FCC to delay its vote on the merger, which is currently scheduled for Thursday.
Commissioner Robert McDowell’s office confirmed today he has taken himself out of the AT&T-BellSouth proceeding. Before joining the FCC in June, McDowell was a lobbyist for a trade association representing telecom competitors to Bell telephone companies.
“Commissioner McDowell has operated as through he is recused. We haven’t heard anything different than that from the general counsel’s office. So he has not been taking meetings or engaging on this matter whatsoever,” said Brigid Calamis, deputy chief of staff to McDowell.
As a result, FCC Chairman Kevin Martin only has fellow Republican Commissioner Deborah Taylor Tate to offset Democratic Commissioners Michael Copps and Jonathan Adelstein.
“Chairman Kevin Martin has indicated that he believes no conditions are warranted but the Democrats are, at a minimum, likely to hold out for provisions similar to those placed on the AT&T-SBC Communications Inc and Verizon Communications Inc.-MCI Inc. deals,” said George Reed-Dellinger, a telecom industry watcher with Washington Analysis. Provisions on the previous telecom mergers included a one-to-two year freeze on raising special-access rates and a spin-off of overlapping competitive local exchange carrier assets.
Consumer advocates and some in the wireless industry and Congress have urged Martin to impose divestiture conditions on the 2.3 GHz broadband wireless assets that BellSouth brings to the table. AT&T and BellSouth argue they should not be require to sell their broadband wireless assets, given that federal regulators did not require a sell-off broadband wireless when they approved Sprint Corp.’s purchase of Nextel Communications Inc. last year.
Today, a group of tech companies and special interest groups called on policymakers to think twice about approving what was described in a telephone news briefing as the reconstitution of the old Ma Bell.
The Justice Department, which typically acts on telecom mergers before the FCC, has not ruled on the AT&T-BellSouth deal.
Reed-Dellinger said DoJ is expected to show its card any day now, and that the FCC’s vote could be delayed until later this month to give commissioners additional time to negotiate any conditions.
