CHICAGO - The drive by AT&T to take over BellSouth by the end of the year will be tested this week, when the Federal Communications Commission will either rule on the merger or decide to delay taking action.
Congressional leaders from both houses and both parties have cautioned federal regulators against haste in deciding the fate of AT&T's deal.
Last month, FCC Chairman Kevin Martin circulated a proposed order to his colleagues that would approve AT&T's deal without imposing any conditions, a move interpreted to open negotiations with the FCC's two Democrats.
Following Martin's actions, Republican and Democratic leaders of key committees in the House and the Senate sent letters to the FCC and to the Department of Justice urging delay on AT&T's case until a decision is returned in a federal court case that is reviewing last year's mega-mergers that combined AT&T and SBC Communications to form the new AT&T and that merged Verizon Communications with MCI.
In their letters, lawmakers expressed concern that last year's telecommunications mergers were approved and closed before the review was begun. They suggest regulators should withhold further action at least until the review of the past mergers is completed.
In their letter, Sens. Mike DeWine, R-Ohio, and Herb Kohl, D-Wis., got very specific, mentioning that when merged, AT&T-BellSouth will hold considerable radio spectrum suitable for wireless broadband.
Because AT&T will be the largest wired phone company in the country and will also own the largest cell phone carrier, Cingular, the senators suggested the company may have little financial incentive to roll out a new broadband wireless service to compete with itself. Requiring the companies to sell their spectrum before approving the merger was mentioned.
Dave Pacholczyk, an AT&T spokesman, said the carrier sees no reason why review of the merger announced in March should be delayed any longer.
``The reasons for the merger are no different now than they were when we announced it,'' he said. ``The competitive environment is more strenuous, cable companies are jumping into our business, there's a convergence of technologies and networks.''
(Jon Van CNII)