A US Federal Communications Commission vote on AT&T Inc's purchase of BellSouth Corp was postponed again as internal debate led the agency on Friday to seek 10 days of public comment on conditions for the $80.8 billion deal.
Republican FCC Chairman Kevin Martin agreed to delay the vote until November 3 after the two Democratic commissioners, Jonathan Adelstein and Michael Copps, requested that the public have time to review and comment on proposed conditions.
"I have instructed staff to place these proposals out for public comment for a period of 10 days," Martin said in a reply to the Democrats. "I note that many of them have been previously filed by other parties and have been commented upon already."
The FCC vote, the last hurdle to the deal that would bolster AT&T's position as the largest US telephone carrier, had already been delayed from Thursday. The Justice Department's antitrust division backed the deal on Wednesday with no conditions, infuriating the Democrats.
"Given the limited analysis from our leading antitrust authorities, it is all the more imperative that we now employ an open process to fully involve affected parties," the Democrats said in a letter to Martin seeking the delay.
The deal would place under one roof about 67.2 million telephone lines, 57.3 million Cingular Wireless customers and 11.1 million high-speed Internet customers. Telephone carriers are facing increased competition from cable providers offering voice and broadband services. The FCC chairman spent much of the week trying to broker an agreement on conditions with Adelstein and Copps and the negotiations had continued late into Thursday evening.
AT&T's proposed conditions, released Friday, included freezing some wholesale prices for access to its networks for 30 months, offering high-speed Internet access to all homes in its 22-state home territory by 2008 and a pledge not to ask the FCC to lift rules for network access by rivals for 30 months.
The company raised the possibility of a condition addressing consumers' access to Internet content, an issue known as Net neutrality. It agreed to a two-year FCC condition for its last acquisition, guaranteeing customers could surf anywhere on the Internet and use any legal applications with the high-speed service. Consumer advocates and competitors have complained that the deal would create a behemoth that would dominate the communications market.
Martin needs the vote of at least one Democrat because, despite a 3-2 Republican majority, Republican commissioner Robert McDowell has said he would not vote to avoid a conflict of interest. He previously worked for a group that represented rivals of AT&T and BellSouth.
AT&T spokesman Michael Balmoris said the company believed no conditions were needed for the deal to benefit the public. "However, we are open to discussing with the Democratic FCC commissioners reasonable conditions on the merger in order to obtain unanimous approval, so long as they do not affect our ability to deliver merger benefits to customers and shareowners, given the intensely competitive environment in which we operate," he said.
Martin proposed three weeks ago approving the AT&T acquisition with no conditions but later suggested requiring AT&T to offer rivals access to at least 30 commercial buildings in BellSouth's area so they can provide service.
If he is unsuccessful at persuading the Democrats to back the deal, Martin could ask the FCC's general counsel to allow McDowell to vote by arguing it would benefit the public interest.
Investors appeared to shrug off the delay. AT&T shares closed Friday unchanged at $33.60, and BellSouth stock closed down 10 cents to $44.13 on the New York Stock Exchange. Affected by the delay was CB Richard Ellis Group Inc, which was poised to replace BellSouth in the S&P 500 index. Its shares fell 47 cents, or 1.8 percent, to $25.52.