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Justin Hibbard
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December 01, 2006

Winning ugly

Steve Rosenbush

There's still a good chance that the AT&T-BellSouth deal will be approved this year, but it's increasingly likely that the Republicans on the Federal Communications Commission will have to use unconventional weapons to make that happen. The FCC is deadlocked 2-2 over the fate of the deal. link.

FCC chairman Kevin Martin is likely to bring in fellow Republican Robert McDowell, who has recused himself from deliberations on the case because he worked for companies that compete with BellSouth. Ironically, he's expected to vote to approve the deal, which is contrary to the interests of the so-called competitive phone companies he once represented. Former FCC official Blair Levin, now a telecom regulatory analyst with Stifel Nicolaus & Co. says the FCC Democrats and the companies have narrowed their differences during the past few days of crucial negotiations, but that they don't have a deal. They are still apart on a number of issues, possbily over the quesition of whether AT&T should be forced to accept binding arbitration to resolve commercial disputes with smaller rivals, Levin says. The next FCC meeting is scheduled for Dec. 20, althoug a vote could slip later into December or into January, Levin says.

It appears that the legal case for bringing McDowell into play is easy enought to make, as long as the FCC general counsel rules that the public interest is better served by having McDowell vote than having him continue to recuse himself. But it would be controversial nonetheless, and with good reason. If McDowell really ought to be recused from the case, it's hard to see how anyone can justify bringing him into action just to tip the outcome of a vote.

11:10 AM

M&A

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