McDowell Wont Vote on AT&T-BellSouth Merger

FCC Commissioner Robert McDowell late Monday announced he will not vote on the pending $85 billion merger between AT&T Inc. and BellSouth Corp.

Late last week, the FCCs general counsel, Samuel Feder, wrote in an analysis that McDowell could indeed take part in the matter, if he so chose. It was not known which way McDowell would lean; he is a Republican, but he also was a lawyer for COMPTEL, a competitive carriers association.

McDowell laid rumors and speculation to rest on Monday afternoon when he said he will not vote on the RBOC deal. He chided colleagues for failing to negotiate the merger in good faith, because that absence of compromise led to inquiries about his participation. It appears that the lingering question of my involvement is being used as yet another excuse for delay and inaction, he said.

The problem, said McDowell, was that Feders memorandum allowing McDowell to decide whether to take part was hesitant, did not acknowledge crucial facts and framed the question of his participation as an ethical coin-toss frozen in mid-air.

The document does not provide me with confidence or comfort, he said, adding a moment later, [W]hile I expected the legal equivalent of body armor, I was handed Swiss cheese.

McDowells statement almost immediately attracted mass-circulated responses. FCC Chairman Kevin Martin said he appreciated McDowells consideration and respected his decision to abstain. He said the commission is not obligated to reach a particular outcome and that he will continue working with his colleagues to make a decision on the transaction.

In the same vein, COMPTEL President and CEO Earl Comstock called for the FCC to move forward with the merger discussions.

Whether the deal is approved or denied, he said, is now largely a function of AT&T’s willingness to address the legitimate public interest concerns raised by the largest telecom merger in history. We should know soon whether AT&T is serious about this merger or not.

An AT&T spokesman did not address McDowells announcement directly except to say the merger would be in consumers best interests and that the company will continue seeking support from commissioners. We will as we have always done do our part to bring the merger review to a bipartisan completion as quickly as possible, the spokesman said in an e-mailed statement.

In detailing the reasons for his decision, McDowell explained he was troubled by several aspects that led him to disqualify himself from the merger proceedings. Chief among them was ethics. First, McDowell said Feder failed to address the ethics agreement to which McDowell consented when he was confirmed by the Senate earlier this year. The agreement stated McDowell must recuse himself for one year on any matter in which COMPTEL is a party, or represents a party. McDowell said he had promised senators he would honor that stipulation.

He also sought input from his personal ethics counsel at the Virginia State Bar and noted, I was not encouraged by their assessment. McDowell further used standards set by the Office of Government Ethics to conclude that his participation in the merger vote could cause citizens to lose confidence in the federal governments integrity.

I have not reached my decision lightly, McDowell said. The American people expect their public servants to make tough decisions, and I have not hesitated from doing so in my brief tenure here at the commission. The American people also demand that public servants operate under the highest of ethical standards. All too often, especially recently, they have been disappointed by those who hold public office. I hope that this is one instance where they are not disappointed.

AT&T Inc.

BellSouth Corp



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