TELECOM Digest OnLine - Sorted: FCC Delays Vote on Telecoms Mergers Vote

FCC Delays Vote on Telecoms Mergers Vote

Jeremy Pelofsky (
Sat, 29 Oct 2005 10:58:27 -0500

By Jeremy Pelofsky

The U.S. Federal Communications Commission said it postponed until
Monday a meeting to vote on Verizon Communications' $8.6 billion
purchase of MCI Inc. and SBC Communications Inc.'s $16 billion
acquisition of AT&T Corp.

The FCC had tried to schedule votes several times on Friday, but
sources close to the matter said the commissioners and staff were
still reviewing and negotiating conditions the agency may require
before clearing the deals.

The agency plans to take up the mergers at a public meeting that is
scheduled to start at 11 a.m. (1600 GMT) Monday. An FCC spokesman
declined to comment on the reason for the delay.

FCC Chairman Kevin Martin had proposed approving the deals without any
conditions. The agency is split with two Republicans and two Democrats
so Martin must convince at least one Democrat to support his decision
or reach a compromise.

One seat on the commission has been vacant since March when then-FCC
Chairman Michael Powell stepped down and President George W. Bush has
yet to name anyone to fill the position.

The lack of a Republican majority for Martin has caused problems
before. He was unable to launch a new review of media ownership
restrictions because of a disagreement between Republicans and

One source close to the matter said some of the conditions under
consideration include freezing for two years or more the wholesale
rates that SBC and Verizon charge competitors for leasing parts of
their networks.

Other conditions could include forcing Verizon and SBC to offer
high-speed Internet service without requiring customers to also sign
up for local telephone service and ensuring a subscriber can surf
where they choose on the Internet, said the source who declined to be

Competing telephone companies have pushed for price controls for
wholesale access to Verizon's and SBC's networks. Consumer advocates
have urged that the two carriers be forced to offer customers
high-speed Internet service without subscribing to local telephone

Consumer groups have warned that SBC and Verizon's acquisitions of
AT&T and MCI, respectively, would doom competition for customers, lead
to higher prices and result in poorer service.

SBC spokesman Michael Balmoris said "we're confident the FCC recognizes
the benefits of our merger with AT&T, and we look forward to a
favorable vote."

Verizon spokesman David Fish declined to comment.

The U.S. Justice Department's antitrust division approved the two
transactions on Thursday on the condition they each offer long-term
leases to competitors for extra lines into some buildings.

Copyright 2005 Reuters Limited.

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