FCC Pulls AT&T-BellSouth Merger Vote from Meeting Agenda

Martin may be close to asking Comr. McDowell to participate in the proceeding to break a possible 2-2 tie, according to the same sources. The impasse appears to be between Republicans Martin and Comr. Tate on one side and Democratic Comrs. Copps and Adelstein on the other. In deciding whether he can vote, McDowell would have to weigh ethical issues. If he chooses to take part he will have to begin a round of meetings and analyze filings. Ethical considerations include McDowell’s membership in the Va. Bar, which prohibits lawyers from acting on issues as public officials in which they were involved when in private practice. Before being confirmed to the FCC, McDowell was a senior vp for CompTel, which opposes the merger.

Asked about pressing McDowell into action, an FCC spokeswoman said Martin has been concentrating up to now on getting a vote by the remaining 4 commissioners but “obviously we have to look at all options.” She said FCC Gen. Counsel Sam Feder would have to determine “if [McDowell] can act and if it is in the best interests of the Commission.” However, McDowell still would have the option of abstaining, she said. A gen. counsel decision would mean only that McDowell was “free to participate” if he wished, she said.

A CLEC source said he doubted Martin would seek McDowell’s participation, since it would require he “take the risk of violating his ethical obligations.” In a Wed. ex parte letter, AT&T said it had phone conversations Tues. with key FCC staff on questions about “special access, naked DSL, ADSL transmission service, Internet backbone, cable VoIP interconnection and the Tunney Act.”

Bruce Fein, a former FCC gen. counsel, said FCC Gen. Counsel Sam Feder should be asked as a matter of practice to rule on whether McDowell may participate in the order. “The customary process… is not occurring,” Fein said: “The general counsel is the ethics officer. That means he decides how various ethics rules apply.” McDowell hasn’t formally been recused but on his own has been sitting out the vote.

Jonathan Lee, CompTel gen. counsel, sees the McDowell issue as a “red herring.” If the Commission splits 2-2, the Communications Act allows a hearing before an ALJ to examine whether a merger is in the public interest, he said. “AT&T is the only one out there saying that Commissioner McDowell must be unrecused or that there is a deadlock,” Lee said. “AT&T is trying to get everybody to look at Commissioner McDowell and Chairman Martin and to make this into a drama… [AT&T] wants McDowell and Martin to walk through the mud for them.”

“This is playing out exactly the way AT&T wants it to play out,” a merger opponent said: “AT&T has absolutely zero interest in striking a deal with the Democrats at this point. AT&T has made the strategic decision to pretend to negotiate with the Democrats while in reality refusing to propose real, meaningful conditions that the Democrats can agree to… AT&T’s goal is to force the Democrats to refuse to accept AT&T’s conditions so they can start pressuring McDowell to enter the proceeding.”

Meanwhile, Rep. Mollohan (D-W.Va.) told the FCC he’s gotten “a substantial amount of… constituent interest” in speedy action on the AT&T-BellSouth merger. In a letter to the Commission, Mollohan said he has no opinion on the merger but his constituents “believe the Commission must make every effort to… bring this matter to a close” because it’s good for employees and shareholders.

Ex-FCC Comr. James Quello said it’s “ludicrous” to call this merger “reconstituting the old AT&T” before the 1984 divestiture. That AT&T had a definite monopoly, but now there is competition from many quarters, such as cable, satellite, other Bell companies “and even the Internet,” Quello told us. Consumers have far “more options” on providers and prices, he said.