Senators question FCC on AT&T merger concessions

U.S. senators questioned Thursday whether members of the U.S. Federal Communications Commission plan to enforce merger conditions that AT&T Inc. agreed to in its December acquisition of BellSouth Corp.

Democratic members of the Senate Commerce, Science and Transportation Committee questioned why FCC Chairman Kevin Martin and Commissioner Deborah Taylor Tate issued a joint statement while approving the merger saying the FCC couldn’t broadly enforce some of AT&T’s concessions.

“What I find difficult to understand is that … you said that you do not intend to stand by the deal that was reached,” said Senator Daniel Inouye, the committee chairman and a Hawaii Democrat.

Martin and Tate, both Republicans, had protested a net neutrality condition, preventing AT&T from giving priority transmission speeds to its own or its partners’ Web content for at least two years. The net neutrality conditions “very well may cause greater problems than the speculative problems they seek to address,” Martin and Tate said in the statement Dec. 29.

Martin on Thursday said he intends to hold AT&T to the net neutrality agreement, but he doesn’t plan to impose those standards on other broadband carriers. “Since [AT&T] volunteered to do that, we would enforce that,” he said. “That does not mean we were changing our policy.”

Martin also suggested another part of the agreement setting out wholesale rates for some data services may be unenforceable.

“What is your legal authority as chairman … to not enforce something you just did?” asked Senator Mark Pryor, an Arkansas Democrat.

AT&T agreed to lower the wholesale special access prices for DS1, DS3, and Ethernet services available to some regional telecom carriers and large businesses, but not to large competitors. But the FCC’s policy in the past has been that wholesale discounts should apply to all customers, Martin said.

“That tariff actually has some components that I believe are illegal under the commission precedent,” Martin said. “They can file [the proposed discount], but I’m not committing to approving something that would be in violation of our precedent. We don’t allow for that kind of discrimination.”

But Commissioner Jonathan Adelstein, a Democrat who pushed for conditions on the AT&T merger, noted that the FCC adopted the AT&T merger conditions on a 4-0 vote. “It’s hard for me to understand why we can’t implement something we adopted unanimously,” he said.

Senators also urged the FCC to work on ways to get broadband service to rural, inner city and poor areas. The FCC on Wednesday issued a report saying the number of high-speed lines in the U.S. increased by 26 percent during the first half of 2006, from 51.2 million to 64.6 million lines in service. The number of high-speed lines grew by 21 percent in the second half of 2005.

Senators also pointed to the Organization for Economic Co-operation and Development’s latest study saying the U.S. ranks 12th in broadband adoption rate among industrialized nations.

Commissioner Michael Copps called on Congress and the FCC to develop a national broadband strategy. He called the U.S. broadband adoption rates “woeful.”

“I am really worried that we can go into the 21st century and have a bigger digital divide in this country … than we had back in the days of plain, old telephone service in the 20th century,” he said. “This just isn’t feel-good liberal theory — we’re talking about the competitiveness of the United States of America.”