• by Joe Mandese  @mp_joemandese, September 19, 2007

In a surprise move coming just weeks before a decision on the $3.4 billion account, Interpublic's Initiative unit has pulled itself out of AT&T's media services review, and the reason may be a new kind of holding company level conflict sensitivity.

In a statement, Initiative said, "We are proud of the work that we have done with Bell South and regret that we are unable to go forward in the AT&T consolidated media review. In light of the conflict policy communicated to us during the briefing process, it will not be possible for us to draw all of the resources from across Interpublic that are required to best meet the clients needs. Naturally, we whish AT&T, and their partners a successful review."

Initiative, which was one of five AT&T roster agencies invited to pitch the business, was originally a BellSouth shop, which was subsequently acquired by AT&T, as part of a consolidation of the U.S. telecommunications market that realigned the Regional Bell Operating Company structure into two giant and apparently highly competitive companies: AT&T and Verizon. While Initiative executives did not comment on the nature of the conflict, sister Interpublic agency Universal McCann is a Verizon shop, and some of the resources Initiative would have needed to service AT&T were part of the shared services within Interpublic.

Interestingly, Publicis' Digitas unit is another one of the finalists in the review, and has become a sister agency of ZenithOptimedia Group, which also works for Verizon. Other finalists in the AT&T review include OMD, and long-time AT&T media roster shop, Mediaedge:cia.

A decision on the AT&T review is expected next month.