Rumor Mill: FCC chair wants to approve telco mergers without asset sales

According to a report in The Washington Post, FCC Chairman Kevin Martin proposed to approve the SBC/AT&T and Verizon/MCI mergers without requiring the juggernauts to sell off any assets. Martin's proposal would require approval from at least two other FCC commissioners, which could prove difficult considering the commission is evenly split politically with two Republicans (Martin is one) and two Democrats. The $16 billion SBC acquisition of AT&T and the $8.5 billion Verizon acquisition of MCI are still waiting for approval from the Justice Department on antitrust grounds. The EU recently approved the mergers after finding little overlap with the merged companies' European counterparts.

Martin's proposal is unexpected since the FCC usually acts on mergers following approval from the Justice Department. Insiders say Martin's jumping the gun is a power play to garner support for the mergers. Allowing the deals to go through without requiring the companies to sell assets will meet with resistance from the other commissioners. Critics of Martin's proposal say the companies should sell off some special access lines to lucrative business customers since the mergers will eliminate the two biggest players in the market for such lines. They argue SBC and Verizon would be free to raise prices on leasing the lines if given full control. Critics of the mergers also want regulators to require the companies to unbundle their DSL service from their other offerings.

For more on the FCC's proposal for the mergers:
- take a look at this article from The Washington Post


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