Martin Recommends Approving AT&T-BellSouth Merger
FCC Chmn. Martin recommends approving the AT&T-BellSouth merger without conditions, sources said Fri. Martin late Thurs. began circulating a proposed order among other commissioners to gain their input on his plan. A source said the chairman wants to schedule the final vote at the FCC’s Oct. 12 open meeting. Martin said last week at an analyst’s conference he would like to see the FCC act on the merger by mid-Oct.
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The proposed order leaves open the possibility that other commissioners could add conditions, a source close to the process said. The draft has blank spaces for that purpose, the source said. “It’s customary to start negotiations with a blank slate,” another source said, referring to expected talks among Martin and colleagues. Other merger orders have started unconditional, only to have conditions added during 8th floor negotiations, a former FCC official said.
No decision has been made on recusing Comr. Robert McDowell from voting on the item, Medley Global Advisors analyst Jessica Zufulo said Fri. in a report. McDowell once was a senior vp of CompTel, a competitive telecom association that has filed in the BellSouth merger proceeding at the FCC. The recusal decision will be made by the FCC Office of General Counsel “which is directed by the chairman who has a clear interest in getting a Republican majority in favor of this deal,” Zufolo said.
The Competition Coalition, a group of organizations that oppose the merger, expressed concern about the draft’s lack of conditions. “As parties who have filed with the Commission concrete evidence of the irreversible marketplace harms that this merger will produce, we urge restraint and reiterate our call for concrete conditions that protect Americans from harm,” the group said.
A group of public interest organizations set a dial-in news conference Mon. on developments it says raise questions about the merger, including “AT&T’s involvement in NSA’s domestic spying program, recent price hikes and job cuts.” The groups include the ACLU, Consumers Union, Consumer Federation of America, NASUCA and Media Access Project.
Sources speculated that DoJ may be poised to act on the merger as well. An FCC source said DoJ almost always acts first on communications mergers, with the FCC following soon after. DoJ’s timetable may depend on a federal court review of the consent decrees that led to Justice approval last year of the SBC-AT&T and Verizon-MCI mergers. There has been speculation that DoJ might wait for the court decision before deciding on AT&T’s BellSouth acquisition. But a source said movement at the FCC may indicate Justice isn’t going to wait. After all, the agencies share information and staff members talk to each other, the source said.
“We believe that the deal is likely to be approved by both the DoJ and FCC this fall with conditions that are similar to the ones adopted last year in the SBC-AT&T and Verizon-MCI deals,” said Stifel Nicolaus in a report.
Net Neutrality Inquiry Started
Meanwhile, the FCC issued a notice of inquiry (NOI) to look at “the state of net neutrality,” an 8th floor source confirmed. Martin has emphasized he sees no need for action on net neutrality, but he decided the agency should assess the market and make sure no problems must be addressed, the source said. Zufolo said Medley expects net neutrality “to be a major item for negotiation between the chairman and the two Democratic commissioners.” Comrs. Copps and Adelstein negotiated net neutrality language into the orders approving last year’s SBC-AT&T and Verizon-MCI mergers.