FCC denied bid by consumer groups to hold AT&T to original divest...

FCC denied bid by consumer groups to hold AT&T to original divestiture conditions on its acquisition of MediaOne. Consumers Union, Consumer Federation of America and Media Access Project wanted FCC to enforce its original deadlines for AT&T and MediaOne to meet certain conditions before their merger could proceed. FCC suspended deadlines 2 weeks after U.S. Appeals Court, D.C., on March 2 struck down Commission’s rules limiting media ownership, finding that agency’s 30% cap on number of subscribers nationwide any one cable operator could reach was arbitrary (CD March 5 p1). Original conditions were that by May 19 AT&T would divest its interests in Time Warner Entertainment or end its involvement in video programming or divest its interests in other cable systems to meet 30% horizontal cap. Under original order, AT&T was supposed to report on March 20 whether it believed it would meet May 19 deadline and, if not, immediately submit trust agreement to sell off some of its assets to meet requirements. FCC, in issuing its latest order, said it recently issued Further Notice of Proposed Rulemaking in hope of resolving cable ownership issues. AT&T argued that Appeals Court ruling undermines FCC ownership rules and essentially made merger conditions null and void. At minimum, AT&T argued, FCC should continue to suspend deadlines until agency had new, legal ownership rules. Consumer groups cited public interest as overriding interest, saying FCC should stick to its original deadlines. Consumers Union also sought further reconsideration, asking that FCC reopen case in order to conduct new public interest analysis. Consumers Union’s Gene Kimmelman said Commission was “obviously disinterested” in enforcing ownership limits but must set cable ownership limits if it was to fulfill Congress’s goal of protecting public interest. FCC order, Kimmelman said, “shines a very strong light” on agency’s ownership proceedings. Comrs. said in their order that they believed suspending deadlines was “the prudent and proper course of action” and that it would be “inappropriate” to reopen merger process now. Comr. Copps, only Democrat on Commission, said in separate statement that while he was sympathetic with consumer groups, he “reluctantly” concurred with his colleagues. However, he said, Commission should keep in mind that, as time went by, continuing to suspend rules “becomes tantamount to their elimination.”