WASHINGTON-Federal Communications Commission Chairman Kevin Martin told Congress he asked agency lawyers to determine whether fellow GOP Commissioner Robert McDowell can be ethically cleared to participate in the agency’s consideration of the politically deadlocked, $79 billion merger of AT&T Inc. and BellSouth Corp.
But the move does not appear to sit well with congressional Democrats.
“It now appears that, despite working for months to reach consensus with my colleagues, three attempts over the past six weeks to have this item considered at an open meeting, and countless hours of internal deliberations, the commission has reached an impasse,” said Martin in a Dec. 1 letter to key members of House and Senate commerce committees.
Martin cited as precedent an FCC general counsel determination in 2000 that brought former FCC chairman William Kennard into a stalemated broadcast matter he had removed himself from for conflict-of-interest reasons. However, a Senate Commerce Committee staffer today said the facts in that case are very different from those in AT&T’s pending acquisition of BellSouth and and that some lawmakers are not persuaded by the crude analogy.
McDowell in August disqualified himself from the AT&T-BellSouth deal review, owing to past lobbyist work for a trade group whose members compete with AT&T and other Bell telephone companies.
Government ethics law allows the FCC’s Office of General Counsel to force McDowell into active duty if it concludes that “the interest of the government in the employee’s participation outweighs the concern that a reasonable person may question the integrity of the agency’s programs and operations.”
“This evening, I received a copy of Chairman Martin’s letter to Congressional leaders regarding the status of the AT&T-BellSouth merger proceeding. I look forward to receiving the General Counsel’s analysis regarding my potential participation,” McDowell said in a statement issued late Friday.
Ethics law forbids McDowell from bucking a general counsel finding requiring his involvement in the AT&T-BellSouth deal. The Justice Department approved the deal without conditions in October, unleashing a flood of criticism from consumer groups and Democrats at the FCC and on Capitol Hill.
Commissioners Michael Copps and Jonathan Adelstein, the agency’s two Democrats, have pressed Martin to attach various competitive and consumer safeguards to any approval of a major telecom transaction that would consolidate Cingular Wireless L.L.C. ownership within AT&T. The No. 1 mobile phone operator is 60-percent and 40-percent held by AT&T and BellSouth, respectively.
Copps and, Adelstein were not immediately available for comment.
While holding only two votes on the five-member FCC, the combination of McDowell’s self-imposed disqualification and the Democrats’ return to power in Congress have given Copps and Adelstein more leverage than usual in seeking concessions from AT&T and BellSouth. Top Democrats have suggested the FCC should hold off action on the deal until next year, stopping just short of asking Martin to further delay the vote.
Consumer groups, Sprint Nextel Corp., T-Mobile USA Inc., wireless broadband provider Clearwire Corp. and others have pushed the FCC to impose conditions on special-access lines and wireless broadband spectrum.
AT&T has proposed conditions and commitments on both flash-point issues as well as others, but consumer groups say they are inadequate. The Government Accountability Office last week said competition in the special-access market is limited in major markets.
“We believe that Mr. McDowell’s participation would make it more likely than not that the FCC would conditionally approve the merger by the end of the year, though we recognize that there’s some possibility of slippage to January,” said telecom analysts at Stifel, Nicolaus & Co. Inc. today. “While we also recognize that even with Mr. McDowell joining the fray there could be some wrangling over the final merger conditions, particularly in the area of special access, we believe his involvement would give Chairman Martin more leverage because the two Democrats would no longer have de facto veto power.”
