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The Department of Justice will review the $42 billion Comcast Corp.-AT&T Broadband merger, a decision that has outraged consumer advocates but could benefit the cable giants. Officials for Comcast and AT&T confirmed that the Justice Department’s antitrust division, rather than the Federal Trade Commission, issued a second request Feb. 21 for more details on the deal. “Comcast Corp. has received a request for additional information from the U.S. Department of Justice in connection with its proposed combination with AT&T Broadband,” a Comcast spokesman said Friday. “Comcast intends to cooperate with the DOJ staff in producing the requested documents and other information.” The spokesman said the companies still expect to close the deal by the end of the year. Antitrust lawyers who practice regularly before the agencies said Comcast-AT&T stand a greater chance of seeing the deal approved with fewer restrictions at the Justice Department than before the FTC. “The FTC is tougher,” one lawyer said. “Anyone in their right mind at AT&T or Comcast was salivating at getting to the Department of Justice.” The antitrust division is easier to deal with because there is a single decision maker, unlike the FTC in which there are five commissioners who vote on every deal, a second lawyer said. “The Justice Department is a lot more predictable,” the lawyer said. That does not mean that the Justice Department will not complete a thorough review. One lawyer predicted AT&T and Comcast could be in for a rocky ride because there is so much political interest in this deal. “Everyone is watching them right now,” the lawyer said. But in the end, the companies should find it easier to cut a deal with Justice Department regulators because it historically has demanded less far-reaching remedies than the FTC, the lawyers said. Consumer advocates had pushed hard for the FTC to review the deal, citing the agency’s recent handling of the America Online Inc.-Time Warner Inc. merger. But the Justice Department always had the inside edge. The agency reviewed the AT&T Corp.-MediaOne merger that resulted in AT&T Broadband, and it has a long history with AT&T in general, dating to the lawsuit that broke up the Bell monopoly. Further strengthening the Justice Department’s hand was a recent proposal clarifying how industry oversight is split between the agencies. That agreement, though put on hold after objections from Senate Commerce Committee Chairman Ernest Hollings, calls for the Justice Department to review all media deals. Jeff Chester, executive director of the Center for Digital Democracy, demanded Friday that Congress hold hearings on why FTC Chairman Timothy J. Muris did not fight for his agency’s jurisdiction over the merger. “We will make this a political issue,” he said. “We are going to make it clear that the FTC abrogated its responsibility to the public. Mr. Muris needs to be raked over the coals.” “Muris was very uninterested in having this case,” added Andrew Schwartzman, president of the Media Access Project, a Washington consumer communications advocacy group. “This was not a fight between two agencies for a deal. That is a problem, and we are very unhappy about it.” Several sources said Muris wrote a letter early this month to Hollings explaining why the Justice Department was better equipped to handle the deal. A spokesman for Hollings did not return calls for comment. An FTC spokeswoman declined to comment. Chester said media deals should undergo review by the FTC, which is less political because it comprises five commissioners, than the Justice Department, which he called the “antitrust Kremlin” because it is less responsive to consumer group input. A Justice Department spokeswoman declined to comment directly on the charges Chester raised. But she said the antitrust division will analyze the Comcast-AT&T carefully. “We will conduct a thorough review of this proposed transaction,” she said. Copyright (c)2002 TDD, LLC. All rights reserved.

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