FCC And Mergers: ''Can You Hold?''

FCC AND MERGERS: "CAN YOU HOLD?"
[SOURCE: Forbes.com, AUTHOR: Tim Doyle]
[Commentary] AT&T Chief Operating Officer Randall Stephenson says he doesn't understand the way the network neutrality debate has been playing in Washington. Four FCC commissioners are now at an impasse over the AT&T/BellSouth deal, in large part because of net neutrality. To get the merger approved, AT&T has pledged that for 2 1/2 years it won't provide Web sites that agree to pay a premium either faster or more reliable service over its Internet backbone. That is good enough for two Republican commissioners, one of them being Chairman Kevin Martin. But the two Democratic commissioners, Michael Copps and Jonathan Adelstein, want a four-year guarantee. Chairman Martin is trying to get the fifth FCC commissioner, Robert McDowell, to break the tie. If McDowell is brought into the decision, Martin would have the leverage to forge a bipartisan compromise, and Democrats would have to scale back their demands on network neutrality, Stifel Nicolaus analyst Blair Levin predicts."It seems like we're heading to a 3-2 vote," agrees Jessica Zufolo, a telecom analyst at Medley Global Advisors. "On net neutrality it seems like [McDowell] would side with the Republicans." AT&T sent a letter to FCC commissioners on Friday sticking to its concessions and saying those opposing the merger are seeking "broad conditions to which AT&T and BellSouth simply cannot foresee circumstances which we could or would agree." Of course, even if AT&T gets its way at the FCC, Congress could still mandate net neutrality. This year, with Republicans in control, a network neutrality provision was almost voted out of the Senate Commerce Committee bill--it missed in an 11-11 tie. Next year, with Democrats in control, who knows? In fact -- although AT&T would never say it -- that's the best argument for approving the BellSouth deal before year’s end, on the terms AT&T has offered. With the company agreeing it won't charge Web sites for 2 1/2 years, Democrats will have a full two years to legislate "net neutrality"--if that's what they and the public really want.
http://www.forbes.com/2006/12/05/beltway-network-neutrality-fcc-biz-wash-cz_td_1206fcc.html