AT&T executives may have to accept concessions on two key...

at the agency to discuss likely concessions, and it placed both issues on the table. Data roaming rules, poised for a vote at the April 7 FCC meeting, are already raising concerns with some House Republicans. While details are still emerging, AT&T executives appear open to accepting a data roaming requirement for 3G and 4G services to win approval for the merger, FCC officials said last week. AT&T executives also indicated some willingness to make additional concessions on wireless net neutrality, beyond the rules approved by a split commission in December. One condition contained in the Comcast-NBC Universal transaction that proved controversial is that it locks Comcast into having to follow net neutrality rules even if they're reversed in court. AT&T’s concessions here would have a similar effect. AT&T appears to be targeting the two FCC Republicans, Robert McDowell and Meredith Baker, and Chairman Julius Genachowski as the three votes needed for approval. The data concession may be relatively meaningless, since with the deal AT&T effectively takes T-Mobile, its only national competitor using GSM technology, out of the picture, an FCC official noted. Public Knowledge Legal Director Harold Feld said no concessions on AT&T’s part would make the proposed merger more palatable. “We are in the zone of [Herfindahl-Hirschman Index readings] where we are effectively collapsing the industry back to natural monopoly levels,” he said. “The ability to exercise market power along every aspect of the industry as a consequence of market share cannot be cured by a handful of conditions. Approving this with conditions would be like throwing Sprint overboard and solving the problem by tossing them a lifeline so they can keep dragging along in the wake.” The concessions would address some of the industry’s concerns with AT&T/T-Mobile, said Media Access Project Senior Vice President Andrew Schwartzman. “However, the details would matter a great deal,” he said. “Pricing, non-discrimination, etc., would matter a great deal. However, the biggest problem, by far, is that conditions usually expire after three years. … What do they do when the conditions expire?” “Given that the FCC is poised to act on data roaming at its April 7th meeting, a concession on data roaming won’t be meaningful to small carriers unless AT&T is willing to go significantly beyond the rules the FCC implements,” said a wireless carrier executive. But Free State Foundation President Randolph May said the commission shouldn’t use the merger as an excuse for making policy. “I'm afraid that before the merger review is finished at the commission -- likely to be some time in 2012 -- this will be another prime example of why the agency’s merger review process needs to be substantially reformed,” he said. “That we're already talking about what concessions AT&T may be willing to make, before any rigorous competition analysis has gotten underway, demonstrates the point. I'll be disappointed if, at the end of the day, AT&T makes concessions on net neutrality, data roaming, or other issues, that go beyond presently applicable legal requirements that are generally applicable on an industry-wide basis.” Meanwhile, House Republicans said the FCC is trying to overstep its authority again after doing so with net neutrality in the pending data roaming order. “I remain skeptical that the FCC has the statutory authority to mandate data roaming,” House Commerce Committee Chairman Fred Upton, R-Mich., said in an e-mail. “Sadly, as the FCC continues to ignore limits to its authority, it seems that the agency is determined to spend more time at the courts of appeal. I look forward to addressing this and other examples of the Commission’s recent ends-based decision making as part of a larger discussion on FCC process reform.” Rep. Marsha Blackburn, R-Tenn., urged the FCC to back off. A member of the House Commerce Committee, she’s “always hesitant to embrace the federal government’s aggressive intrusion into the marketplace,” her spokesman said. “The precedent that the FCC seeks to set here, that a private company should invest in a network, only to have the government intervene when they attempt to profit from that network, is not unlike net neutrality. In both cases federal intervention is a disincentive to innovation, investment, and job creation.” Rep. Mary Bono Mack, R-Calif., “continues to believe that the FCC is inserting itself into an argument where it lacks legal authority, much like the issue of net neutrality,” said aide Ken Johnson. Genachowski doesn’t support “a common-carrier mandate for data roaming,” he said in a letter to Upton that was released Friday. The March 17 letter responded to a letter last month in which Upton and other committee Republicans voiced concerns that the regulator was trying to “circumvent” the Communications Act by imposing common-carrier requirements on an information service. The draft order avoided that legal authority concern, Genachowski said. “To the contrary, the draft order under consideration eschews a common carriage approach and leaves mobile service providers free to negotiate and determine, on a customer-by-customer basis, the commercially reasonable terms of data roaming agreements. This is not common carriage.” The proposed rules would “incent potential roaming partners to come to the bargaining table to negotiate private commercial deals,” Genachowski wrote House Communications Subcommittee Ranking Member Anna Eshoo, D-Calif., and other lawmakers who support the proposed rules. “These rules also balance the need for commercial roaming agreements with the legitimate challenges posed by network congestion. Moreover, it ensures that the Commission is merely a backstop in the process, and that it is in the best interest of all parties to work out private deals without relying on the Commission.” Genachowski believes that “a data roaming rule is necessary to ensure vibrant competition in the mobile marketplace, to unleash billions of dollars of investment that is currently sidelined, to create thousands of new jobs and to meet the consumer demand for seamless nationwide coverage, be it for voice or data,” he said in letters to the Hill. Some providers have been slow or unwilling to negotiate 3G or 4G roaming agreements, and the FCC’s “basic bipartisan voice roaming rules will be in jeopardy” when the mobile world shifts to LTE, Genachowski said.