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As Federal Communications Commission Chairman Kevin Martin angles to win a vote on two major telecom mergers by next month, the conditions and divestitures that the agency and Department of Justice are likely to require for approving the deal are coming into focus. Despite a 2-2 split between Republicans and Democrats on the commission, Martin is pressing agency staff to draft orders approving SBC Communications Inc.’s proposed $16 billion purchase of AT&T Corp. and Verizon Communications Inc.’s $6.75 billion union with MCI Inc. “[Martin's] putting it on the agenda to get it going,” said a source close to the agency. “He’s teeing it up.” To win a majority, Martin needs the vote of at least one Democratic commissioner, giving them more leverage to win conditions than they would have if one Republican FCC seat wasn’t empty. The Democratic commissioners are likely to press the FCC to require the merging telecom companies to offer broadband digital subscriber line service “naked” — in other words, without requiring DSL consumers to take the merged companies’ phone services, too. Martin has been reluctant to support such a requirement. In March, he voted with previous FCC Chairman Michael Powell and Republican Commissioner Kathleen Abernathy to override state utility rules that would have forced BellSouth Corp. to offer naked DSL. But a source close to the agency said the main goal of the three Republicans was to reinforce FCC supremacy over state telecom laws rather than sort out the nuts and bolts of naked DSL. Consequently, Martin may ultimately support such a concession, especially given long-standing pressure from some members of Congress.

Key lawmakers, including Sens. Mike DeWine, R-Ohio, and Herb Kohl, D-Wis., chairman and ranking Democrat, respectively, on the Judiciary Committee’s antitrust subcommittee, both are pressing the FCC and Department of Justice to require naked DSL.

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