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FCC Delays AT&T-BellSouth Merger Vote

AT&T and BellSouth will have to keep the champagne on ice for at least another day.

The telephone giants had hoped the Federal Communications Commission (FCC) would approve their merger plans Thursday morning, but late Wednesday night the FCC announced it was delaying the vote until at least Friday.

"We are committed to evaluating merger applications fairly and in a manner consistent with the public interest. We are continuing to work to complete our AT&T and BellSouth merger review in a timely manner," FCC spokesman Clyde Ensslin said in a statement.

FCC Chairman Kevin Martin also favors an unconditional approval of the merger, but the two Democrats on the five-person panel are pushing hard for network neutrality provisions to be attached to the deal.

Martin lacks a majority among the three Republicans on the FCC since Robert McDowell plans to recuse himself from the vote. Prior to being appointed to the FCC, McDowell worked as a lobbyist for competitive local exchange carriers, who are opposed to the merger.

In hopes of appeasing the Democrats, Martin is proposing the FCC open an inquiry into network neutrality. That item, too, was delayed until Friday.

"The new AT&T wants all the market power of its old monopoly without any consumer protections," Ben Scott, the policy director of the media reform group FreePress, said at a Tuesday teleconference opposing the merger.

"The FCC must not sign off on this deal without applying serious conditions that prevent discrimination and foster broadband competition. First and foremost, this merger should not be allowed to proceed without permanent, binding protections for net neutrality."

The Department of Justice gave the merger a no-strings-attached approval on Wednesday.

In approving the mergers of AT&T-SBC and Verizon-MCI last year, the FCC forced the companies to adhere to the agency's network neutrality principles for two years.

Those principles include that consumers are entitled to access the lawful Internet content of their choice, run applications and services of their choice and plug in and run legal devices of their choice.

The principles also state consumers have a right to competition among network providers, application and service providers and content providers.

What the FCC principles do not state is that broadband providers must treat all network traffic equally.

Verizon and AT&T have publicly stated they intend to charge content providers different fees to access consumers based on bandwidth consumption, but will not block, degrade or impair delivery of the content to consumers.

The merger would make AT&T the world's largest telecommunications company with 70 million landline customers across 22 states. Currently a co-owner of Cingular Wireless with BellSouth, the deal would give AT&T full control of the nation's largest cellular company.

Combining the two companies' DSL broadband customers would give AT&T 9.1 million high-speed Internet customers, barely behind market leader Comcast's 9.3 subscribers.

When the proposed merger was announced in March, the stock swap was valued at $67 billion. The rising price of both stocks over the months has pushed the value to almost $80 billion.