TELECOM Digest OnLine - Sorted: FCC Commissioner Can Break Tie in AT&T-Bell South Merger Vote

FCC Commissioner Can Break Tie in AT&T-Bell South Merger Vote

HighTech Magazine (
Mon, 11 Dec 2006 02:53:19 -0600

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FCC Commissioner Can Break Tie In AT&T-BellSouth Merger

The head lawyer for the Federal Communications Commission has paved
the way for Commissioner Robert McDowell to break the deadlock on the
mega-merger between AT&T and BellSouth, despite his recent affiliation
with an organization strongly opposed to the deal. Samuel Feder,
general counsel for the FCC, issued a memorandum on Friday evening
clearing the path for McDowell to participate in the vote.

Feder said he based his decision on a similar situation the FCC dealt
with under then-chairman William Kennard. The commission has been
split between Democrats and Republicans on what, if any, conditions
should be imposed on the merger, which is currently valued at around
$83.7 billion.

The two Democratic commissioners would like to see more restrictions,
including a provision to protect Net neutrality, which would bar
companies from prioritizing Web traffic or charge extra fees for
providing enhanced services over a network. The deadlock has resulted
in the final vote on the merger being postponed three times.

McDowell, a Republican, would cast the tiebreaking vote. McDowell
recused himself from the process, however, because just prior to
joining the FCC earlier this year, he had been a lobbyist for seven
years for a trade organization called CompTel, which represents
companies competing against the incumbent phone companies.

CompTel has been one of the strongest opponents to the merger. While
Feder has authorized McDowell to vote on the deal, he emphasized
several times in the memorandum he sent to McDowell that it was
ultimately McDowell's decision whether to participate in the
proceedings or not. "Balancing competing concerns here was
difficult," he said.

"And reasonable people looking at these facts could disagree about the
appropriate result. However, on balance, I find that you should not be
barred from participating in the proceeding if you so choose to do
so." McDowell said in a statement that he is reviewing Feder's

He also said he plans to review Feder's responses to a letter sent to
the general counsel's office earlier this week by Congressman John
Dingell, D-Mich., the incoming chairman of the Energy and Commerce
Committee and Ed Markey, D-Mass., who is likely to become chairman of
a telecommunications panel.

In their letter, the Congressmen posed 15 questions aimed at gathering
information on the laws that Feder plans to consult in reaching his
decision and the history of actions in situations when commissioners
have recused themselves. "I look forward to receiving a copy of Mr.
Feder's response to Congressman John Dingell's letter of December 5,"
McDowell said.

"In the meantime, I strongly urge the participating parties and my
four colleagues to resolve their differences in the same amicable and
unified manner they did in the similar merger between SBC and AT&T
just last year." Earlier on Friday, AT&T and BellSouth said they had
no objection to McDowell voting on the merger.

In a letter to the FCC's general counsel, they said they trusted
McDowell to live up to his pledge at his Senate confirmation
hearing -- to be impartial and fair. FCC Chairman Kevin Martin, who sent
a letter to Feder last week urging him to clear McDowell to vote,
applauded the general counsel's decision.

After sharp criticism from Democratic lawmakers, Martin explained his
concern that the merger has been before the commission for more than
eight months already. The agency usually tries to complete actions
within 180 days. Gigi Sohn, president of Public Knowledge, a consumer
group opposed to the merger, was heartened by the fact that the
general counsel emphasized that the decision was ultimately

But she criticized the agency for being more concerned about pleasing
the companies involved than about responding to the public. "The
concept of the public interest was nowhere to be found in this General
Counsel's opinion," she said in a statement.

"The chief concern is the effect on the companies involved, and not
the effect on the public interest. Government's role should be broader
than meeting arbitrary deadlines or acting for the convenience of
large companies."

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