Last week, the FCC had on its open meeting agenda the approval of AT&T’s acquisition of BellSouth. After the Democratic Commissioners were not ready to vote for approval of the transaction, the Commission delayed approval of the deal to give the public the opportunity to comment on some possible conditions to be put on the merger. Does the process followed in this major Telco merger set a precedent that might be used in major broadcast proceedings, including the current multiple ownership proceeding?
In the AT&T/Bell South merger, the two Democratic Commissioners objected to approving the deal without conditions. As AT&T was willing to accept some conditions on the merger, the Chairman decided to ask for public comments on those conditions (see FCC public notices here and erratum here). This was much the same process that the Democratic Commissioners complained was not followed in the summer of 2003, when the Commission tried to adopt revisions to the multiple ownership rules that were later largely thrown out by the Third Circuit Court of Appeals. The Democratic Commissioners had contended that the rules adopted in July 2003 should have been been put out for public comment before becoming final – in which case some of the issues that came up in the Third Circuit, such as questions about the Diversity Index, would have been avoided.
As the Commission has now used this process in a major Telco merger, might it follow the same process before adopting any final rules in the Multiple Ownership proceeding? In many ways, it was the process that the FCC used in adopting the new rules on children’s television issues (though the FCC actually adopted new rules, the effect of the rules were stayed, while the Commission considered revisions proposed by major stakeholders before it adopted its revised set of rules late last month). The Democrats reportedly asked for assurance that, before the Notice of Proposed Rulemaking was adopted in the multiple ownership proceeding, public comment would be sought on any final rules. As there were three Republicans on the Commission who outvoted the Democrats on the ownership issues (while there were only two Republicans voting on the Telco merger as Commissioner McDowell recused himself ), no assurance of public comment on draft final rules was provided. But perhaps, as the ownership Notice of Proposed Rulemaking had so few concrete proposals (see our summary of the proposals), this Telco case will signal a new procedure for dealing other major controversial issues.