AT&T-BellSouth Stalemate Continues; McDowell Won't Vote - InformationWeek

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AT&T-BellSouth Stalemate Continues; McDowell Won't Vote

The decision by Commissioner McDowell to refrain from voting means the commission will have to consider whether to impose conditions on the deal, including net neutrality requirements.

The net neutrality debate appears certain to get a thorough airing by the FCC after Commissioner Robert McDowell decided to refrain from voting and not break the stalemate on the pending AT&T-BellSouth merger.

McDowell, a Republican appointee, announced Monday that ethical considerations prevented him from breaking the 2-2 tie by commissioners; the Republican commissioners, led by FCC Chairman Kevin Martin, favor the merger while the two Democrats want concessions from the telecom firms, particularly in the area of net neutrality.

Net neutrality, which calls for all Internet traffic to be treated the same, is favored by major online providers like Google and Yahoo. But AT&T and other telecom providers want to be able to impose additional charges for the use of their networks.

In his Monday decision, McDowell held to his earlier decision to refrain from voting on the merger because he previously had lobbied for a telecom trade group. The $86 billion merger, which would combine several of the so-called Baby Bells -- local telephone companies that were part of the Bell System and broken up more than two decades ago -- is expected to be eventually approved. The hurdle remains what concessions -- if any -- will be required by regulators.

In a lengthy tortured statement and analysis, McDowell traced the thought processes he underwent in reaching his decision. He said he had expected an opinion from the FCC that would clear the way for him to vote on the merger. "While I expected the legal equivalent of body armor, I was handed Swiss cheese," he stated.

Expressing confidence that the merger would be resolved, McDowell said: "Because I am an incurable optimist, I am confident that this merger can be resolved with the same speed and unanimity as the SBC/AT&T and Verizon/MCI mergers of last year."

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