AT&T/BellSouth Approval Merger On the Cusp

It appears as though the FCC's draft order approving the AT&T/BellSouth merger went on circulation last night, setting the transaction up for approval at the October 12 meeting.

It shouldn't come as a surprise, given Ed Whitacre took a limousine ride over to the Commission last week to discuss "international and state" approvals of the merger. We look forward to the announcement of the AT&T/Verizon/Qwest merger.

Pre Election Scramble @ the FCC

We have it on good information that the FCC is scrambling to approve the AT&T/BellSouth merger at its September agenda meeting. This is counter to the conventional wisdom that had the FCC holding off on acting on the merger until after the Election and after the posture of the Tunney Act case (reviewing the DOJ and FCC approval of the SBC/AT&T merger) was more certain.

In addition to approval of the merger, word is that folks on the Hill are trying to schedule Chairman Martin's confirmation hearing this month before the Election recess. It appears that after a slow August, its back to business as usual in the halls of Congress and the FCC!

USF Notice of Apparent Liability Issued

Commission Issues Notice of Apparent Liability for Forfeiture
for Failure to Contribute to the Universal Service Fund

The Federal Communications Commission ("FCC") has assessed a forfeiture of $529,000 against Local Phone Services, Inc. d/b/a Best Phone ("LPSI"), for repeated and willful failures to contribute fully and timely to the Universal Service Fund ("USF") and certain additional violations.

LPSI failed to timely file certain required Telecommunications Reporting Worksheets ("Worksheets"). The FCC uses the information submitted in these Worksheets to determine the amount of the USF payment due by that telecommunications carrier. The failure to file the Worksheets and pay the subsequent USF assessments results in disproportionate distribution of USF liability between carriers. Compliant carriers end up bearing the "economic costs and burdens associated with universal service", while delinquent carriers reap "an unfair competitive advantage."

Although a reduction in the forfeiture amount is typical when the violation is disclosed voluntarily, the FCC declined to reduce the forfeiture in this case. The FCC expects the voluntary disclosure to be accompanied by "swift and effective corrective actions" which were not forthcoming in the instant case.

Please feel free to contact us with any questions you may have regarding Universal Service obligations.