December 8, 2006 5:08 PM PST

FCC commissioner can break tie in AT&T-BellSouth merger

The head lawyer for the Federal Communications Commission has paved the way for Commissioner Robert McDowell to break the deadlock on the mega-merger between AT&T and BellSouth, despite his recent affiliation with an organization strongly opposed to the deal.

Samuel Feder, general counsel for the FCC, issued a memorandum on Friday evening clearing the path for McDowell to participate in the vote. Feder said he based his decision on a similar situation the FCC dealt with under then-chairman William Kennard.

The commission has been split between Democrats and Republicans on what, if any, conditions should be imposed on the merger, which is currently valued at around $83.7 billion. The two Democratic commissioners would like to see more restrictions, including a provision to protect Net neutrality, which would bar companies from prioritizing Web traffic or charge extra fees for providing enhanced services over a network.

The deadlock has resulted in the final vote on the merger being postponed three times. McDowell, a Republican, would cast the tiebreaking vote.

McDowell recused himself from the process, however, because just prior to joining the FCC earlier this year, he had been a lobbyist for seven years for a trade organization called CompTel, which represents companies competing against the incumbent phone companies. CompTel has been one of the strongest opponents to the merger.

While Feder has authorized McDowell to vote on the deal, he emphasized several times in the memorandum he sent to McDowell that it was ultimately McDowell's decision whether to participate in the proceedings or not.

"Balancing competing concerns here was difficult," he said. "And reasonable people looking at these facts could disagree about the appropriate result. However, on balance, I find that you should not be barred from participating in the proceeding if you so choose to do so."

McDowell said in a statement that he is reviewing Feder's opinion. He also said he plans to review Feder's responses to a letter sent to the general counsel's office earlier this week by Congressman 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.

In their letter, the Congressmen 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.

"I look forward to receiving a copy of Mr. Feder's response to Congressman John Dingell's letter of December 5," McDowell said. "In the meantime, I strongly urge the participating parties and my four colleagues to resolve their differences in the same amicable and unified manner they did in the similar merger between SBC and AT&T just last year."

Earlier on Friday, AT&T and BellSouth said they had no objection to McDowell voting on the merger. In a letter to the FCC's general counsel, they said they trusted McDowell to live up to his pledge at his Senate confirmation hearing--to be impartial and fair.

FCC Chairman Kevin Martin, who sent a letter to Feder last week urging him to clear McDowell to vote, applauded the general counsel's decision. After sharp criticism from Democratic lawmakers, Martin explained his concern that the merger has been before the commission for more than eight months already. The agency usually tries to complete actions within 180 days.

Gigi Sohn, president of Public Knowledge, a consumer group opposed to the merger, was heartened by the fact that the general counsel emphasized that the decision was ultimately McDowell's. But she criticized the agency for being more concerned about pleasing the companies involved than about responding to the public.

"The concept of the public interest was nowhere to be found in this General Counsel's opinion," she said in a statement. "The chief concern is the effect on the companies involved, and not the effect on the public interest. Government's role should be broader than meeting arbitrary deadlines or acting for the convenience of large companies."

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