WASHINGTON—The Federal Communications Commission’s scheduled vote on the $69 billion merger of AT&T Inc. and BellSouth Corp. imploded today, with Chairman Kevin Martin delaying action on the deal until at least next month. The news follows revelations that AT&T has offered to accept merger conditions in order to win unanimous agency approval of the deal.
Democratic FCC Commissioners Michael Copps and Jonathan Adelstein asked Martin this morning to postpone today’s vote—which originally was to have taken place yesterday—and also outline AT&T’s proposal for conditions on the merger. Martin agreed to do so, saying he would put AT&T’s offer out for public comment, and try to schedule a vote on the deal on Nov. 3.
It’s not clear what AT&T’s proposal entails.
Telecom analysts say BellSouth and AT&T want the FCC to sign off on the merger before the Nov. 7 midterm elections, fearing possible complications if Democrats regain one or both chambers of Congress. It appears AT&T is willing to accept some conditions in order to push the deal through quickly.
Reuters yesterday shed light on AT&T’s proposal, quoting AT&T lawyer Robert Quinn as stating: “We have put a full set of conditions on the table that are reasonable and protect consumers. I want a deal with these guys; we want a 4-0 vote.”
Federal law essentially halts lobbying during the seven days from the date the FCC releases a public meeting agenda. However, FCC commissioners can reach out to telecom companies. It is unclear who contacted whom in this case.
AT&T did not immediately return e-mails requesting comment.
NuVox Communications and XO Communications on Thursday filed an emergency petition with the FCC demanding disclosure of any AT&T communications with the FCC on the AT&T-BellSouth merger.
Martin has refused to say whether the agency’s office of general counsel will force Republican Commissioner Robert McDowell—who removed himself from merger deliberations because of conflict-of-interest considerations related to past lobbying for a competitive telecom trade group—to vote on the AT&T-BellSouth merger by declaring him ethically fit to participate.
Without McDowell, Martin seemingly faces a 2-2 deadlock in trying to clear the AT&T-BellSouth deal free of conditions. Martin supports the Justice Department approach of approving the transaction without conditions, a stance that consumer groups, lawmakers and telecom competitors have decried as unjustified. At a minimum, critics want the FCC to impose conditions on wireless broadband spectrum and special-access lines controlled by AT&T and BellSouth.
A federal court here is currently reviewing the Justice Department’s handling of AT&T-SBC Communications Inc. and Verizon Communications Inc.-MCI mergers okayed last year by the FCC and DoJ. Both mergers had conditions attached to them.
“Only two weeks ago, members of Congress on both sides of the aisle urged the department not to act prematurely on the AT&T/BellSouth merger, but to instead await the outcome of the ongoing court proceeding in other mega-telecommunications mergers—which raises the same competitive concerns—and to place specific conditions on the merger to protect competition,” said Sen. Patrick Leahy (D-Vt.), ranking member of the Senate Judiciary Committee. “By approving the merger without any conditions, the administration is avoiding court review, ignoring Congress and protecting big business at consumers’ expense. Congress must be vigilant—if the Bush administration will not be—to protect consumers from anticompetitive actions and attempts at re-monopolization.”
