FCC chairman moves to break deadlock in AT&T-BellSouth deal

NEW YORK (AP) FCC Chairman Kevin Martin on Friday initiated a process that may break the deadlock in the agency's vote on AT&T Inc.'s proposed acquisition of BellSouth Corp. by allowing a fifth

Friday, December 1st 2006, 6:23 pm

By: News On 6

NEW YORK (AP) FCC Chairman Kevin Martin on Friday initiated a process that may break the deadlock in the agency's vote on AT&T Inc.'s proposed acquisition of BellSouth Corp. by allowing a fifth commissioner who had recused himself to participate.

Martin asked the general counsel for the Federal Communications Commission to consider whether Robert McDowell ought to be authorized to participate in the deliberations on the roughly $80 billion deal, FCC officials said Friday.

The chairman sent letters to the relevant committees in Congress advising them of the request, according to McDowell's office and an FCC official who spoke on condition of anonymity because Martin's office had not issued a public statement.

McDowell, one of three Republicans on the five-person commission, had recused himself because he is a former lobbyist for a trade group that opposes the merger.

Without McDowell, the vote has been deadlocked at 2-2, with Martin and another Republican appointee favoring approval of the deal, and the two Democrats demanding the companies offer additional concessions to ensure it doesn't harm consumers.

The Antitrust Division of the Justice Department cleared the deal on October 11th, declaring that there were no competitive concerns and opting not to require the combined company to divest any assets or make any other concessions.

The FCC's press office did not immediately respond to a phone call seeking comment. A copy of Martin's letter to Congressional leaders viewed by The Associated Press expressed frustration with the holdup.

``Despite working for months to reach consensus with my colleagues, three attempts over the past six weeks to have this item considered at an open meeting, and countless hours of internal deliberations, the Commission has reached an impasse,'' the letter said. ``Given the Commission's inability to reach consensus on this matter, I have asked the General Counsel to consider whether the Government's interest would be served by permitting Commissioner McDowell, who has not participated in this proceeding so far, to participate.''

McDowell issued a short statement saying he looks forward to the general counsel's analysis ``regarding my potential participation.''

McDowell once worked for the trade association COMPTEL. Federal ethics regulations permit the FCC's general counsel to clear McDowell to vote as long as the ``interest of the government in the employee's participation'' outweighs any concerns about how the vote may affect the agency's integrity.

AT&T's acquisition of BellSouth, first announced in March, would create the nation's largest provider of traditional phone, Internet and cellular services. The combined company would generate $117 billion in revenue and operate across 22 states stretching coast to coast across the South and up through the Midwest.

Consumer groups are asking for promises that AT&T not discriminate against certain kinds of Internet traffic and offer reasonably priced high-speed Internet service without requiring customers to buy phone service.

Consumer groups and competitors also want the FCC to force AT&T to divest unused wireless spectrum unless it plans to use it.