AT$T-BellSouth merger vote delayed for third time

from: CNET

AT&T-BellSouth merger vote delayed for third time

By Marguerite Reardon
Story last modified Thu Nov 02 17:23:36 PST 2006

The Federal Communications Commission on Thursday delayed for a third time a vote on whether to allow AT&T to acquire BellSouth--a postponement that's due to the commissioners' inability to agree on conditions of the deal.

The vote was scheduled for Friday during the commission's open meeting. But the agency sent a notice late Thursday removing the item from the agenda.

The merger, which is valued at roughly $80 billion, was unconditionally approved by the antitrust division of the U.S. Department of Justice last month. The FCC approval is the last regulatory hurdle the merger must overcome before the deal closes.

Before the last scheduled FCC vote on Oct. 13, the two Democratic commissioners, Jonathan Adelstein and Michael Copps, were outraged that the Department of Justice hadn't imposed any conditions on the merger. In an effort to win their votes, AT&T submitted a new proposal to the FCC prior to the scheduled meeting.

The vote was postponed when the Democratic commissioners asked for more time to consider the proposal. They also wanted it to be available to the public for comment.

After three weeks of public comments being submitted, it appears the commission is still deadlocked on the issue of the merger. Now, the fifth member of the commission, Republican Robert McDowell, will likely be forced to vote on the deal, several telecom experts have predicted. McDowell had recused himself from the proceedings, because prior to becoming a commissioner, he had worked for Comptel, an organization that opposes the AT&T-BellSouth merger.

Several consumer groups have criticized AT&T's proposal as not going far enough to protect competition and provide benefits to consumers. Many of the concessions AT&T proposed were simply extensions of earlier conditions put on the company from its merger with SBC. Additional concessions included a new $10 a month broadband service tier, free modems and a promise of a temporary freeze on its rates for other service providers that use its network.