Martin Expected to Seek Hill Input before Acting on BellSouth Merger
FCC Chmn. Martin hesitates to act on the AT&T-BellSouth merger until he meets with key Democratic members on the Hill to get their views, regulatory sources said Mon. No meeting has occurred, but FCC staff members reportedly made informal contact last week with staffers for incoming House Commerce Committee Chmn. Dingell (D-Mich.) and were assured Dingell isn’t calling for a delay on the merger vote.
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Dingell last week created uncertainty when, during a call with media, he called for delaying the AT&T-BellSouth merger until next year, then said afterward on CNBC he wasn’t asking the FCC to delay its vote (CD Nov 9 p5). Since last week’s election results, discussions on the merger at the FCC have diminished.
“Martin doesn’t want to go blindly into the deal without knowing the political context,” said a regulatory lawyer. Martin inevitably will ask “How do I get to 3 votes at the Commission and what do I have to answer for on the Hill if I do this?” the source said. “We've heard rumors Martin might be trying to get a Hill meeting to gauge if moving forward would raise problems,” said another source.
The FCC remains likely to approve the merger this year, Stifel Nicolaus analysts predicted. “It is now clear that [Dingell] is not demanding that the FCC delay action until he takes over as chairman next year and can hold a hearing,” the analysts’ report said: “We think it is clear that Mr. Dingell is not sending a message to the Commission that it necessarily should slow down its review.” But Dingell’s comments “have bolstered the bargaining position of the FCC’s two Democratic commissioners” who seek concessions from AT&T and BellSouth, Stifel Nicolaus said.
A source who opposes the merger said no progress has come in negotiations since the election and little is likely this week because many of the commissioners’ legal advisers are at the NARUC conference in Miami Beach. “The ball is in AT&T’s court,” the source said: “What AT&T needs to do is come up with an offer to respond to the Democrats.” He said if Martin seeks to get recused Comr. McDowell to cast a 3rd Republican vote on the merger, the chairman “has got to figure out… the price he has to pay.” Martin has to consider whether Dingell would call him to a hearing “and beat [him] up and down,” the source said.
Jessica Zufolo, analyst with Medley Global Advisors, said House and Senate Democrats are “overwhelmed” with a heavy lame duck session schedule. In the House, for example, few will focus on the merger and like issues until after the Thurs. leadership elections, she said. “There’s little doubt the election really does force the FCC to revise its whole agenda,” Zufolo said: “I fully anticipate the chairman [will] spend a great amount of time with leaders in both the House and Senate. It’s fully in keeping with the way Martin operates… He'll probably be well received. In the Senate he’s already generally liked among the Democrats.”