WASHINGTON-Sources indicate Federal Communications Commission Chairman Michael Powell has conditionally approved the proposed $41 billion merger between No. 2 Cingular Wireless L.L.C. and No. 3 AT&T Wireless Services Inc., but potential complications could delay expected final government action on the deal to later this month.
The other four FCC commissioners have yet to weigh in on the merger because they have yet to receive a draft order from Powell. A Powell aide said the FCC chairman wants the draft decision circulated to other commissioners before the end of the week.
Sources said Commissioners Kevin Martin, Michael Copps and Jonathan Adelstein are expected to closely scrutinize the Powell draft to ascertain how it addresses rural roaming, wireless-wireline competition and other issues raised in the proceeding.
If the three commissioners are dissatisfied with Powell’s treatment of the hot-button issues, sources predict a fight will break out on how the Cingular-AT&T Wireless merger order is written and what conditions, if any, should accompany FCC approval.
Powell is said to support the divestiture of wireless licenses in several markets where Cingular Wireless and AT&T Wireless hold close to100 megahertz.
There is another possible snag as well.
According to sources, the Justice Department and the FCC may differ on how merger approval should be structured.
The Justice Department, sources said, already may have completed its antitrust analysis and informally notified the FCC of its decision to impose either few conditions or none at all on the approval of the Cingular Wireless-AT&T Wireless transaction.
The Justice Department did not return a call for comment.
Cingular is owned by two regional Bell telephone companies. SBC Communications Inc. and BellSouth Corp. hold 60 percent and 40 percent of Cingular Wireless, respectively.
Critics point out that if the Cingular-AT&T Wireless merger gets the green light, three landline monopolies-SBC, BellSouth and Verizon Communications Inc., parent company of No. 1 mobile carrier Verizon Wireless-will control 70 percent of the nation’s mobile-phone subscribers.
As such, sources said some Democrats and merger opponents are highlighting the wireline-wireless issue in view of Powell’s long-held support for competition among different technological platforms such as wireless, wireline and the Internet.
