WASHINGTON (AP) – The Federal Communications Commission’s top lawyer on Friday authorized one of its members to vote on the proposed buyout of BellSouth Corp. by AT&T Inc., despite an apparent conflict of interest. The move could break a deadlock on the deal.

The decision came a week after FCC Chairman Kevin Martin declared an impasse in the proceeding and asked General Counsel Sam Feder to determine whether Commissioner Robert McDowell, a former lobbyist, should be allowed to vote on the $84 billion acquisition.

The deal would be the biggest in U.S. telecommunications history.

The next open meeting for the agency is Dec. 20, but Martin said in an interview with The Associated Press on Friday night that he does not anticipate putting the issue up for a vote then. It would not give McDowell enough time to get “up to speed” on the issues, Martin said.

In Feder’s eight-page opinion, he argued that McDowell should be allowed to vote because he had not participated in the merger proceeding as a lobbyist, did not stand to gain financially from his vote and that it would be impossible for someone else to take his place in the proceeding.

But Feder was also clearly torn, noting that Robert Cusick, director of the Office of Government Ethics had said the decision was a close call on which reasonable people could differ and that Cusick said he would decide against authorization but that “the FCC could reasonably come out the other way.”

While McDowell, a former lobbyist for a trade group that opposes the merger, is authorized to participate, that doesn’t mean he will be forced to vote yes or no. He could still abstain.

“What this did was remove any legal impediment that prevented him from voting if he wanted to,” Martin said Friday.

Martin and AT&T are betting that McDowell, despite his history, will vote to approve the merger.

In a statement, McDowell not indicate whether he had made up his mind, saying only that he was reviewing Feder’s opinion.

McDowell also noted that the incoming chairman of the House Energy and Commerce Committee, Rep. John Dingell, D-Mich., had written the commission posing questions about its precedents for recusals and other issues.

“I look forward to receiving a copy of Mr. Feder’s response,” McDowell said in his statement, adding that in the meantime he hoped the other four commissioners would resolve their differences and reach an agreement.

Dingell, in a statement, questioned the circumstances surrounding the decision, including the OGE director’s comment, saying they raised “serious questions of both ethics and propriety.”

McDowell is one of three Republicans on the five-member commission. He has not participated in the merger because he believes a vote would violate conflict of interest rules.

Without McDowell, Martin has declined to schedule a vote because it has appeared the result would be a 2-2 deadlock, with Martin and another Republican appointee favoring the deal and the two Democrats opposing it.

Commissioners Michael Copps and Jonathan Adelstein have asked AT&T to agree to further concessions, including assurances the giant company would not discriminate against Internet traffic, an issue known as network neutrality.

Martin said he met with the two Democrats earlier this week and still believed they were at an impasse. He confirmed that the key sticking point revolved around the network neutrality issue.

The Antitrust Division of the Justice Department cleared the deal on Oct. 11, declaring there were no competitive concerns and opting not to require the combined company to divest assets or make any other concessions.

The proposed takeover has been approved by regulators in 18 states, leaving the FCC as the final hurdle.

Last week, Martin wrote a letter to several members of Congress who oversee the FCC, saying in part: “Despite working for months to reach consensus with my colleagues, three attempts over the past six weeks to have this item considered at an open meeting, and countless hours of internal deliberations, the commission has reached an impasse.”

Both Democrats criticized the move then.

Copps said allowing McDowell to vote would create more problems than it resolves. It also would “short-circuit discussions, and very likely shortchange consumers,” he said. Commissioner Jonathan Adelstein echoed those comments.

McDowell once worked for the trade association COMPTEL, which represents companies that compete with AT&T and the other regional Bell phone companies. Federal ethics regulations permit the FCC’s general counsel to clear McDowell to vote as long as the “interest of the government in the employee’s participation” outweighs any concerns about how the vote may affect the agency’s integrity.



On the Net:

Federal Communications Commission: http://www.fcc.gov/

AT&T: http://att.sbc.com/

BellSouth: http://www.bellsouth.com/


Only subscribers are eligible to post comments. Please subscribe or to participate in the conversation. Here’s why.

Use the form below to reset your password. When you've submitted your account email, we will send an email with a reset code.