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Federal Communications Commission Chairman Michael Powell said Wednesday he expects the agency to rule on Cingular Wireless LLC’s $41 billion acquisition of AT&T Wireless Services Inc. by mid-October. The wireless bureau is on track to officially advise agency commissioners on the deal within a week, Powell told reporters. The five commissioners could take as much as three additional weeks to rule on the deal, he said. Telecom observers expect regulators to approve the creation of the wireless giant, though the agency may require the companies to divest assets in some markets. Responding to concerns by consumer groups that Cingular could bundle wireless service with wireline products offered by its parents, BellSouth Corp. and SBC Communications Inc., Powell said the agency is considering these issues. “We’ll probably have a more serious conversation about this [bundling issue] once the order is out,” Powell said. The agency has about two weeks remaining before its informal 180-day window for acting on mergers expires. In wide-ranging remarks at a press briefing, the FCC chairman said the agency is in no rush to promulgate new limits on media mergers despite a June order from the 3rd U.S. Circuit Court of Appeals demanding the commission better justify many of the restrictions it placed on broadcast and newspaper deals. Powell also praised Congress for changing a requirement that the agency establish new media merger regulations every two years to one that only calls for new rules every four years. “We now have some breathing space to take stock and proceed cautiously and deliberately,” he said. Powell said he is pleased the court earlier this month sided with the commission and approved controversial rules to further limit radio mergers in most markets. The FCC’s new approach will essentially use markets as the Arbitron ratings service defines them. That replaces a complex system that used signal strength to define a market. This older approach tended to inflate the size of markets by including stations that did not compete for advertising dollars in the same geographic markets. In a brief interview, FCC media bureau chief Kenneth Ferree said the agency expects to lift its freeze on radio merger applications within the next few weeks. The media bureau is still developing market definitions for the remaining 20 percent of the United States that Arbitron’s geographic census-driven system does not cover. Ferree said the bureau is struggling to develop these market classifications because of the agency’s limited resources devoted to the area. The FCC may request that the court reexamine other parts of the order, but Powell gave no specifics and added that the agency may still appeal the ruling against the FCC rulemaking to the U.S. Supreme Court. An FCC plan to ease restrictions on cable company mergers continues to languish, raising questions about the prospects for industry consolidation. Current regulations prohibit a company from owning cable or satellite systems that reach more than 30 percent of paid U.S. television subscribers. Industry observers expect Powell to ultimately ease these caps by permitting a single company to reach up to 40 percent of cable TV subscribers. Ferree said he has “no idea” when the agency will complete its oft-delayed overhaul of the rules, arguing that it is hard to get good data to justify merger limits. “It’s an ongoing process,” he said in a brief interview. “I can’t tell you that this is going to be resolved soon.” The media bureau sent draft rules up to Powell last year but the chairman returned the proposal for additional work. “The chairman told me he didn’t think that version was defensible,” Ferree said. Powell had previously said he expects the agency to develop new rules by year’s end. Copyright �2004 TDD, LLC. All rights reserved.

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