December 6, 2006 11:50 AM PST

AT&T-BellSouth vote raises new concerns

An attempt by the Federal Communications Commission chief to break an ongoing deadlock over the multibillion-dollar merger between AT&T and BellSouth is encountering scrutiny from Democrats and advocacy groups.

FCC Chairman Kevin Martin, a Republican, revealed in a letter Friday to the congressional leadership that he has asked the FCC's general counsel to rule on whether it would be in the government's best interest to allow Republican Commissioner Robert McDowell to participate in the proceedings and cast the tie-breaking vote. McDowell has so far excluded himself from the proceedings because of his longtime work as a lobbyist for the trade association Comptel, which represents Bell company competitors and openly opposes the deal.

Martin's move has sparked criticism among the Democratic leaders of committees that oversee the FCC and from public interest groups, which have decried the step as essentially an unwarranted waiver of ethical rules governing the agency's activities.

"I urge you to reconsider such drastic action and to return to constructive negotiations with your colleagues," Sen. Daniel Inouye, D-Hawaii, who will assume chairmanship of the Senate Commerce Committee next year, wrote Tuesday in a letter to the FCC chairman.

At the moment, two Republican and two Democratic commissioners have failed to reach a consensus on what conditions to impose on the companies, resulting in at least three postponements of a final decision on the deal. Among the points of contention is that the two Democrats would like to add a Net neutrality requirement--that is, generally barring the companies from prioritizing Web content or charging extra for enhanced services.

In the House of Representatives, John Dingell, D-Mich., the incoming chairman of the Energy and Commerce Committee, and Ed Markey, D-Mass., who is likely to become chairman of a telecommunications panel, sent their own letter (click here for PDF) to FCC general counsel Sam Feder on Tuesday. Although not openly critical, they posed 15 questions aimed at gathering information on the laws that Feder plans to consult in reaching his decision and the history of actions in situations when commissioners have recused themselves.

By contrast, Rep. Joe Barton, R-Texas, the current chairman of the House Energy and Commerce Committee, and Rep. Fred Upton, R-Mich., who presides over a telecommunications panel, applauded Martin's request for review of McDowell's inclusion as an "appropriate" step and looked forward to hearing the general counsel's conclusions. There is no need for further delay on the FCC's part, they suggested in a joint letter, noting that the Department of Justice has already approved the deal without condition.

An FCC representative said Wednesday that the letters are being reviewed but declined to comment further. It is unclear when Feder will issue his ruling. McDowell has reportedly said that regardless of the general counsel's conclusion, he would also seek input from the Virginia Bar Association, from which he has his license to practice law, about the ethics of his participation in the vote.

The FCC's next meeting is currently scheduled for Dec. 20, but it has not yet publicly disclosed whether the merger decision will be on its agenda.

In defending his move to Capitol Hill leaders, Martin has said he is concerned that the merger has been before the commission for more than eight months when the agency "attempts" to complete such actions within 180 days. He also said the FCC's general counsel in the past has authorized otherwise-recused commissioners to participate in situations where an impasse has been reached.

But Inouye and watchdog groups said an earlier example referenced by Martin was not comparable to the present scenario because the FCC commissioner involved there was many years removed from the lobbying activities that would have conflicted with that FCC proceeding. In that case, the FCC was dealing with rules regarding personal attacks and political editorials for broadcasters, and then-Chairman Bill Kennard was ultimately allowed to participate even though he had represented the National Association of Broadcasters many years earlier. McDowell, by contrast, represented Comptel for the seven years leading up to his FCC confirmation.

"Members of Congress should make clear that having Commissioner McDowell participate in the AT&T-BellSouth merger at this point would deeply compromise the integrity of the commission," said Gigi Sohn, president of the tech-focused advocacy group Public Knowledge, which wants a Net neutrality mandate imposed.

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