TELECOM Digest OnLine - Sorted: Too Hot to Touch? FCC Now Mum on AT&T/Bell South Merger

Too Hot to Touch? FCC Now Mum on AT&T/Bell South Merger (
Wed, 15 Nov 2006 17:17:20 -0600

WASHINGTON--A Federal Communications Commission official who may hold
the deciding vote on a pending merger between AT&T and BellSouth
declined to say Wednesday whether he plans to participate in the
process. Analysts scrutinizing the deal's progression have speculated
that Republican Commissioner Robert McDowell would recuse himself from
the decision on whether to approve the controversial $80 billion deal.
McDowell spent seven years as an executive with the trade association
Comptel, which lobbies for competitors of the Bell telephone
companies, before assuming the FCC post six months ago. But now that
the FCC has thrice postponed its vote because the remaining two
Democrats and two Republicans are reportedly at an impasse on
conditions for the deal, some have said he may be forced to weigh in.

Following a luncheon speech at an event hosted here by the Federal
Communication Bar Association, McDowell told reporters he had "no
news" to report on the deal. The U.S. Department of Justice gave its
unconditional blessing to the melding of the telecommunications giants
in October, but now the FCC is apparently stalling on the matter,
with no date in sight for a final approval or disapproval ...

As for how the agency plans to handle the hot button issue of Net
neutrality, McDowell also had nothing new to offer
Wednesday. Proponents of the concept, which include Google, eBay and a
number of consumer advocacy groups, would like to see Congress pass
new laws prohibiting network operators from charging Internet content
companies extra fees for premium delivery. Telephone and cable
companies have said they need the option of using such a business
model to recoup investments in new broadband infrastructure.

"We're going to collect more data and study the marketplace," he told

Letting the marketplace trump government regulation was a recurrent
theme in McDowell's 11-minute speech to representatives from
communications companies -- including AT&T and Verizon -- and law
practices. Sometimes government must step in to address market
failures, he said, but those actions must be "narrowly tailored and

McDowell did, however, issue a vague warning to companies
contemplating interference with consumers' ability to access and
upload content as they please. "Those who act to frustrate this new
wave of democracy do so at their own peril," he said.

The speech was light-hearted at times -- "fluffy chitchat," as
McDowell described it -- as the lawyer-turned-commissioner cracked
jokes about regulatory filings that only fellow communications
attorneys could appreciate. When asked by an audience member how the
FCC's policymaking would be influenced by the new Democratic majority
in Congress, he quipped, "I'd written about that in my speech and
included a joke that my staff made me take out."

When the crowd's laughter died down, the Republican appointee
regrouped with a stock answer: "We will continue to march forward, and
we'll keep the dialogue going."

[TELECOM Digest Editor's Note: There is no word yet on exactly how --
if at all -- AT&T is dealing with this matter. I am sure they wish
it was over, with a ruling favorable to themselves, but that may not
come to pass. It would be a real shame (snicker) if the FCC ruled
against it (snicker, guffaw!) and AT&T had to start from scratch. PAT]

Copyright 2006

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