McDowell Recuses Himself from Merger
FCC Comr. McDowell said Mon. he won’t participate in the vote on the AT&T-BellSouth merger, citing concerns with advice FCC’s Gen. Counsel Samuel Feder provided and input from ethics advisors. “While I expected the legal equivalent of body armor, I was handed Swiss cheese,” McDowell said, criticizing Feder’s memo for not making a “strong and clear case” for his participation. McDowell read a lengthy statement to the media, taking no questions and leaving promptly.
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Feder’s memo doesn’t acknowledge “crucial facts and analyses and concludes by framing this matter as an ethical coin-toss frozen in mid-air,” McDowell said: “The document does not provide me with confidence or comfort.” He also condemned Feder’s responses to questions (CD Dec 13 p1) posed by House Commerce Committee Chmn.-designate Dingell (D-Mich.) and Telecom Subcommittee Chmn.-Designate Markey (D-Mass.). Feder sent his 8-page memo in mid-Dec. (CD Dec 11 p1) before responding to Dingell’s questions.
Dingell praised McDowell’s decision as showing him to be a “man of principle.” Now the Commission can get on with the proper performance of its duties with the “closing of this ungainly side show,” Dingell said: “The continued recusal of Commissioner McDowell should not be viewed as an opportunity for individual commissioners to extract carte blanche from the merging parties.” The public interest demands that the matter be brought to a timely resolution, Dingell said. Markey praised McDowell for “adhering to sound ethical standards and judgments.” The Commission ought to return to the job of assessing whether the merger may be approved by closing remaining public interest loopholes in the proposed deal, Markey said.
Saying he respects McDowell’s decision, FCC Chmn. Martin said his aim has been to ensure that the Commission acts on the merger. No particular outcome was obligated by enlisting McDowell’s participation, Martin said in a statement, adding that the Commission is responsible for timely decisions. Now that McDowell has decided, Martin will “try to work with my colleagues to bring our consideration of this merger to conclusion,” the Chmn. said.
Senate Commerce Committee Chmn.-Designate Inouye said McDowell showed “great integrity,” according to a committee spokesperson. Now that McDowell has removed an “ethical cloud,” the companies should have the incentive to negotiate with the other 4 commissioners, the staffer said: “We hope that AT&T and BellSouth will finally be willing to come to the table with serious proposals.”
McDowell cited his concern that Feder failed to discuss McDowell’s ethics agreement, which states that for a year he must abstain from matters involving former employer CompTel. The ethics agreement contains representations McDowell made when testifying before the Senate, and senators relied upon those assertions when confirming him, McDowell said. The Gen. Counsel’s office prepared the ethics agreement before McDowell was confirmed and after completing an inquiry to ensure compliance with federal conflict of interest rules.
“I respect Rob’s decision,” said FCC Comr. Copps, one of the 2 Democrats on the Commission who has been seeking concessions from the merging parties. McDowell’s move offers “clarity on who will be participating in this proceeding,” he said: “That should give some juice to our ongoing discussions.” Comr. Adelstein, the other Democrat, said he will “continue to review this merger with the goal of promoting competition and broadband deployment.” The public interest “involves not just the merging parties but also the many other businesses and consumers across the country that are directly impacted by this merger.”
CompTel Pres. Earl Comstock said he respects McDowell’s decision to abstain and hopes AT&T would “finally engage in forthright negotiations on conditions to address the serious competitive harms raised by this merger.” It’s up to AT&T to address public interest concerns raised by history’s largest telecom merger, Comstock said: “We should know soon whether AT&T is serious about this merger or not.”
Public Knowledge Pres. Gigi Sohn said McDowell was right to abstain from the vote. The merger is too important to be clouded by ethical questions bound to come up had McDowell taken part, she said: “It is now up to Chairman Martin to negotiate a balanced set of terms and conditions” that will guard the public interest and Internet freedom. McDowell made a courageous decision, Media Access Project Pres. Andrew Schwartzman said: “There is no doubt that the legitimacy of all FCC decision-making would have suffered had Commissioner McDowell yielded to pressure and agreed to vote on the merger.”
AT&T reacted mildly, with a statement saying the companies “sought the support for this merger from every member of the Commission since the very beginning and we will continue to do so.”