FCC merger vote delayed

The Federal Communications Commission has delayed its vote on the AT&T-BellSouth merger, originally scheduled for today, prompting speculation that FCC Chairman Kevin Martin is still trying to convince the panel’s two Democrats to approve the merger.

There also is widespread speculation that part of the compromise on merger approval could include tougher language on Net neutrality than the commission included in approving the earlier SBC-AT&T and Verizon-MCI mergers. In those mergers, the FCC stipulated the new entities must follow the Net neutrality principles it passed in August 2005.

Net neutrality proponents are hoping not only for broader application of Net neutrality by the FCC but also tougher rules and better enforcement.

When the commission issued its Net neutrality policy, it omitted any protection for service and content providers, focusing exclusively on consumer rights, said Earl Comstock, president and CEO of Comptel, the trade association of competitive service providers, in a panel discussion Wednesday. That is a step backward from the policies of former FCC Chairman Michael Powell.

“If it’s only the end-user that has these rights, and individual complaints are the only means of enforcement, then you prohibit any class-action rules, and we are left with specific complaints being considered on an ad hoc basis to ongoing recurrent problems,” he said. As long as a limited number of large players control network access, Comstock said, “there is always going to be inherent incentive to use that control to disadvantage competitors.”

Thus far, however, the most anyone is seeing out of the FCC is a rumored Notice of Inquiry regarding Net neutrality.

That is little more than “a toe in the water,” said Alfred Mamlet, who heads the Technology Department and the Telecommunications and Intellectual Property practice groups at Steptoe & Johnson. “If they were doing something serious about it, they would issue an NPRM [notice of proposed rulemaking].

“Once we see what they are doing on the AT&T-BellSouth merger and the terms of reference on the NOI, we should have a better idea of what they are thinking,” he said. “My guess is what we are going to get in the NOI is the FCC asking some questions about who should be protected and what should be protected. The August 2005 principles don’t go that far in many respects.”

The House of Representatives has already passed a telecom reform measure that does not include Net neutrality principles. Sen. Ted Stevens’ (R-Alaska.) measure in the Senate has gone through committee but is being held up in part due to its lack of Net neutrality language.

The Department of Justice approved the AT&T-BellSouth merger Wednesday, prompting criticism from Sen. Daniel Inouye (D-Hawaii).

“I am disappointed that the Department of Justice appears to have chosen political expediency over the public interest in approving the merger of AT&T and BellSouth without any conditions to protect consumers and prevent competitive harms,” he said in a statement. “Now, more than ever, it will be essential for the FCC to stand up for consumers and to insist upon strong conditions to protect competition.”