[JURIST] The American Civil Liberties Union [advocacy website] on Monday requested [press release] that the Federal Communications Commission [official website] hold back approval of a merger [AT&T press release] between telecommunications giants AT&T and BellSouth [corporate websites] until the FCC investigates allegations [JURIST report] made last month that the two companies, along with Verizon Communications [corporate website], handed over customer phone records to the government as part of the domestic surveillance program [JURIST news archive] conducted by the National Security Agency [official website]. Citing the Telecommunications Act of 1996 [FCC materials] in its filing [PDF text], the ACLU argued:

Further we believe that the FCC has a statutory duty as part of its review of the AT&T, BellSouth merger application to perform a full investigation of the claims reported in USA Today. The Communications Act provides that transfer applications, such as those filed by BellSouth and AT*T, must be treated by the FCC as though the transferee applied under Section 308 of the Act. 47 U.S.C. § 310(d). Section 308 provides that before granting an application, the Commission must make an affirmative determination that the applicant possesses the requisite character qualifications to be a Commission licensee. 47 U.S.C. § 308 (b). As the Commission has held, the central focus of its "review of an applicant's character qualifications is conduct that bears on the proclivity of an applicant … to comply with our rules and orders." Cingular/AT&T Order at ¶47. All violations of the Act, the Commission's rules and/or policies "have a bearing on an applicant's character qualifications." Id.

In this proceeding, AT&T and BellSouth bear the burden of proving, by a preponderance of the evidence, that the proposed transaction "will not violate or interfere with the objectives of the Act or the Commission's rules," and that "the predominant effect of the transfer will be to advance the public interest." SBC/Ameritech Merger Order at ¶ 48. In reviewing the merger application, the Commission must "weigh the potential public interest harms of the proposed transaction against the potential public interest benefits to ensure that the Applicants have shown that, on balance, the merger serves the public interest, convenience and necessity." Id. As part of its merger analysis, the Commission must therefore consider whether AT&T and BellSouth are in compliance with the Communications Act and the FCC's implementing rules, and whether this merger will result in any additional harm to consumer privacy.

The ACLU added that "[i]t would be a cruel irony if BellSouth had not participated in the program but as a result of this merger, BellSouth customers became unwilling surveillance targets."

FCC chairman Kevin J. Martin last month declined to investigate [JURIST report] allegations reported by USA Today that the three telecommunications companies had handed over customer information without warrants because the information collected by the NSA was classified. Throughout the allegations, BellSouth and Verizon have both denied handing over customer information [JURIST report], while AT&T has failed to deny the allegations. Ken Belson of the New York Times has more.