Changes at FCC could affect AT&T’s bid to acquire T-Mobile

As the Federal Communications Commission reviews AT&T’s $39 billion bid for T-Mobile, major staff changes at the agency are creating uncertainties about when and how the commission will vote, experts say.

One Republican-held chair is open on the five-member commission now that Meredith Attwell Baker has resigned to take a position at cable giant Comcast. Democratic Commissioner Michael J. Copps will leave later this year— months before the agency’s review of the deal is expected to be complete.

The staff changes, as well as growing opposition by state utilities and competitors such as Leap Wireless and Sprint Nextel, have spurred intense lobbying over the deal.

AT&T disclosed earlier this week that it has spent $6.8 million on lobbying in the first quarter, up from $5.93 million during the same period last year.

If the deal is approved, AT&T would become the largest wireless carrier in the country, with 120 million subscribers, and eight of 10 cellphone contracts would be in the hands of two companies — AT&T and Verizon Wireless.

The FCC has endured a firestorm of criticism during the past year over some of its decisions, including Chairman Julius Genachowski’s open Internet access rules prohibiting carriers from blocking Web traffic. The commission’s approval of Comcast’s mega-media joint venture with NBC Universal irked consumer groups and competitors.

Now AT&T’s potential union with T-Mobile has become the agency’s biggest focus.

AT&T wants to close its deal for T-Mobile by March. That could be good timing for the company. So close to the presidential election, critics of the deal say, regulators might be reluctant to oppose a merger being promoted by AT&T and its union, the Communications Workers of America, who say it will create jobs and bring high-speed wireless Internet service to the entire nation.

“In the current political dynamic, where the White House and administration are running as fast as it can to appear business-friendly, AT&T can bring significant pressure to bear to approve the merger despite so much evidence that shows it isn’t good for consumers or competition,” said Joel Kelsey, a staffer at the public interest group Free Press.

No one at the agency has indicated how they will vote, and the commission could approve the deal with two empty seats.

That makes for lots of guessing games. Adding new commissioners could prolong the review process if they need time to get up to speed on the issues.

And FCC members aren’t necessarily expected to vote along party lines. For example, Democratic commissioners have expressed concerns about media industry consolidation. But Genachowski, a Democrat, voted in favor of Comcast’s joint venture with NBC Universal earlier this year. Copps was the only member who voted to block the deal.

That makes the timing of Copps’s departure the biggest question facing the future of telecom policy and AT&T’s merger bid, some experts say. He was the most stalwart member against media consolidation and in favor of net neutrality.

“There are a lot of moving pieces, but Copps is the biggest one,” said an FCC official who was not authorized to speak on the record.

Cecilia Kang is a national technology reporter, writing about tech and Internet policies at the Federal Communications Commission and Federal Trade Commission and how regulations affect businesses and consumers.
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