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FCC Delays Decision On AT&T/BellSouth Deal

Commission Democrats Assert Themselves; Chairman Leaves Town

By Martin H. Bosworth
ConsumerAffairs.com

October 13, 2006

AT&T • Slamming • Long Distance • Local • Wireless • Broadband • Telemarketers --- News • AT&T Agrees to Refund Some Ringtone Charges • States Asked to Probe AT&T U-Verse Explosions • AT&T Exits Pay Phone Business • AT&T Changes Contract Policy • AT&T Changes Terms Of Service After Outcry • AT&T Agrees to New Stolen Cell Phone Rules • AT&T Stiffens Language Covering Objectionable Content • AT&T Adds Parental Controls To Mobile Phones • AT&T Slammed Over Rebate Policies • Appeals Court Shreds AT&T Arbitration Clause • Court OKs Rebate Lawsuit against Cingular/AT&T • AT&T Trashes Cingular Brand • AT&T Offers Net Neutrality Concessions To Win Merger Approval • FCC Delays Decision On AT&T/BellSouth Deal • Justice Department Green Lights AT&T-BellSouth Merger • FCC Clears the Way for AT&T-BellSouth Merger • AT&T Trumpets New TV Service • AT&T Web Site Hacked; Customer Data Exposed • AT&T Sues Calling Record Brokers • AT&T Declares Consumers' Personal Data "Corporate Property" • AT&T Plans to Kill Cingular Name • Report: AT&T Acquiring BellSouth • SBC Recast as AT&T • FCC approves AT&T, MCI Deals • Justice Dept. OKs AT&T, MCI Sell-Outs • SBC Will Keep AT&T Name • Consumer Groups Oppose Big Telco Mergers • SBC Buys AT&T • AT&T Will Pay Refunds to New Yorkers • AT&T Will Pull Out of 7 States • AT&T Teams With Sprint to Return to Wireless Business • Minnesota Sues AT&T • Class Action Charges AT&T With Slamming • Another AT&T Rate Hike • AT&T Hiking Minimum Fees • AT&T Faces $780,000 Do-Not-Call Fine • AT&T Will Run Do-Not-Call List • Supreme Court Denies AT&T's Appeal of Arbitration Ruling

The resurrection of Ma Bell has hit a slight snag, as FCC commissioners have asked for more time to study the concessions offered for the approval of the biggest telecom merger in history.

The FCC was originally scheduled to vote on the merger of AT&T with BellSouth today, but members Michael Copps and Jonathan Adelstein asked for more time to review an offer made by AT&T that would free up circuit space in commercial buildings for use by other companies.

FCC chair Kevin Martin, who supports the merger without conditions, was scheduled to leave the country on Saturday, further delaying a vote. He scheduled a vote for Nov. 3rd, but his spokeswoman said it might occur earlier.

Adelstein and Copps managed to persuade Martin to open the debate to public comment for a ten-day period.

In their letter to Martin asking for more time to review the decision, they noted that the AT&T proposals "raise a number of significant questions and complex technical issues for us to consider. In light of these developments, we believe that the best way to advance the commission's review is to open this process to public comment."

Copps and Adelstein are uniquely positioned to affect the merger decision. The five-man FCC board consists of 3 Republicans and 2 Democrats.

Republican commissioner Deborah Taylor Tate was expected to support the merger. Robert McDowell, a Republican and the commission's newest member, recused himself from the vote due to his former career as a lobbyist for a trade association that advocated for rivals of AT&T.

The Justice Department had approved the merger without any conditions on Oct.11th, under heavy criticism from consumer groups who claimed the merger would harm competition and lead to increased prices for consumers.

Advocates of net neutrality also opposed the merger due to AT&T's support of a "tiered" Internet system, where clients would have to pay more for priority access to Internet content.

Democrats Infuriated

The two Democratic commissioners were reportedly infuriated that the Justice Department approved the merger without any conditions or restrictions.

Observers speculated that Adelstein and Copps might ask AT&T to ensure their networks do not favor some Internet content over others, as well as freezing prices for leasing of long-distance lines and offering "naked" DSL service to customers without requiring them to sign up for phone lines or other services.

Similar restrictions were placed on the previous merger of AT&T and SBC, as well as Verizon's buyout of MCI last year.

If the FCC approves the merger of AT&T and BellSouth, the resultant company will be the largest telecommunications provider in the United States, with a purchase price of over $80 billion, service in 22 states, and over 300,000 employees. AT&T estimated 10,000 jobs would be cut as a result of the merger.

AT&T would also gain total control of Cingular Wireless, the nation's largest cellular telephone company.

The FCC had recently challenged Verizon and BellSouth over their mysterious "regulatory cost recovery fees," charged to consumers after the companies had won relief from paying into the Universal Service Fund.

Rather than pass the savings on to customers, the telcos charged unexplained new fees that matched the old fees almost exactly and pocketed the loot.

Both companies rescinded the fees after the FCC threatened to investigate. The move was atypical for the FCC under the business-friendly Martin, leading to speculation that the FCC was bowing to election-year pressure.

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