October 12, 2006 7:28 AM PDT

FCC delays vote on AT&T, BellSouth merger

The Federal Communications Commission postponed a meeting scheduled for Thursday to vote on the proposed merger between AT&T and BellSouth.

The meeting is now scheduled for Friday.

The delay is likely a signal that FCC Chairman Kevin Martin still needs more time to gather support for the merger. So far, Martin has support from fellow Republican Deborah Tate, but the two Democratic commissioners, Michael Copps and Jonathan Adelstein, have expressed reservations about the merger. The fifth commissioner, Republican Robert McDowell, has recused himself from voting because of his work as a lobbyist before he became a commissioner.

The merger, which was announced in March and is now valued at roughly $79 billion, was approved by the Department of Justice's antitrust division on Wednesday without any restrictions. The approval set off protest from several consumer groups and smaller Internet and telephone companies, as well as from some Democratic lawmakers.

"I am disappointed that the Department of Justice appears to have chosen political expediency over the public interest in approving the merger of AT&T and BellSouth without any conditions to protect consumers and prevent competitive harms," Sen. Daniel Inouye, D-Hawaii, said in a statement.

He urged the FCC, which will give the final regulatory approval for the merger, to take more decisive action. "Now, more than ever, it will be essential for the FCC to stand up for consumers and to insist upon strong conditions to protect competition," he said.

The combined AT&T and BellSouth would be the country's largest phone company, offering local phone, long-distance and DSL services in 22 states stretching from Florida to California. The two companies also jointly own mobile phone operator Cingular Wireless. If the merger goes through without any restrictions, AT&T would become the sole owner of the wireless carrier.

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