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FCC Balks at AT&T/BellSouth Merger Vote

On Friday the 13th, the day of the big vote at the Federal Communications Commission (FCC) on the merger of AT&T Inc. (NYSE: T) and BellSouth Corp. (NYSE: BLS), three of the voting commissioners have apparently gotten spooked.

Commissioners Jonathan Adelstein and Michael Copps issued statements Friday asking that the vote be postponed, and for the issue to be re-opened to public comment, Light Reading has learned. (See BellSouth Merger Q&A.)

Another commissioner, Commissioner Robert McDowell, has asked that he be recused from the vote because he was once a member of the CLEC association Incompas . An FCC spokesman says McDowell still "considers himself recused" today.

The 11:30 p.m. EST meeting in which the vote was to take place had not yet begun at 1:00 p.m. EST Friday.

A source inside the Commission said he would be "very surprised" if the vote took place Friday. He noted that he wasn't privy to conversations going on now among the chairman and the commissioners.

Specifically, Copps and Adelstein ask that the Commission take fresh proposals from AT&T and BellSouth, and to open a new round of public comment on the matter. (See CU, CFA Protest AT&T/BellSouth.)

"Such an approach is even more important because the Department of Justice approved this combination with very little substantive analysis and only a day before we were scheduled to vote, making our task much harder," the letter reads.

The commissioners are concerned that the current structure of the AT&T/BellSouth merger might create an environment of anti-trust in the telecom market. (See Is an SBC/BellSouth Merger Next?.)

"Given the limited analysis from our leading anti-trust authorities, it is now imperative that we employ an open process to involve all affected parties, including the applicants, in order to get the public and expert view that is otherwise lacking," the letter reads.

The delay on the vote would be the second in two days. The FCC late Wednesday postponed the vote, and a related network neutrality item, until today. This morning's letter comes one day after the Commission's announcement Thursday that it would prepare a new study on the current state of video competition in the U.S. The FCC wants fresh data on the effect IPTV and broadband video will have on existing video pricing.

That issue has everything to do with the merger, according to AT&T. AT&T says BellSouth does not have the resources by itself to roll out video services that would keep cable prices in check. Only with the merger, AT&T says, can competitive video be offered within Bellsouth's footprint.

— Mark Sullivan, Reporter, Light Reading

Mark Sullivan 12/5/2012 | 3:37:47 AM
re: FCC Balks at AT&T/BellSouth Merger Vote Folks in Washington say it will be at least Nov. 3 before anything new happens on this issue. Rep. Barton (R-Texas), father of the video franchise bill, is asking "what's the holdup -- I thought this was a done deal?! Shoot!"
materialgirl 12/5/2012 | 3:37:47 AM
re: FCC Balks at AT&T/BellSouth Merger Vote Wow, the Bush administration is trying to stuff these monopolistic deals down our throats before the Nov. elections. No one asked questions, clearly. And why bother? These guys give the RNC their dues. What else matters? They dont' ask about WMD, and they don't ask about monopoly power. After all, Whitacre sealed the deal at the Inaugural Ball. He said so himself.

Now, a few brave souls at the FCC raise a hand. Most be Foley. Go guys, Go.

Like ATT is going to "protect the consumer" after they stiffed people like me with "necessary price increases" and charge me 2x what Qwest does (that is until I dropped their "service"). Ask away.
rjmcmahon 12/5/2012 | 3:37:47 AM
re: FCC Balks at AT&T/BellSouth Merger Vote re: "Now, a few brave souls at the FCC raise a hand. Most be Foley. Go guys, Go."

A cynic would suggest they are extorting, uh-uhm raising, capital for the upcoming elections. Let's see where things stand after November.
Mark Sullivan 12/5/2012 | 3:37:46 AM
re: FCC Balks at AT&T/BellSouth Merger Vote DC people say Martin and his Republican friends will apply pressure to get Commissioner McDowell to un-recuse himself from the merger vote. McDowell is the third Republican commissioner, the tie-breaker. Without him it could be a draw when the merger vote finally happens.

Look for LR coverage early next week on just what concessions Adelstein and Copps are trying to get from AT&T in exchange for a Yes vote.
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