FCC Issues Statement Regarding Antitrust Merger Reviews
(January 15, 2000) The FCC issued a statement on Wednesday, January 12, regarding the FCC's conduct of antitrust merger reviews. The statement addresses to two frequent criticisms: that the FCC has promulgated no rules which govern its merger reviews, and that the FCC takes too far too long.
| See, FCC Statement, 1/12/00. |
The Federal Communications Commission issued a release which states that "staff have been working on a timetable to ensure that even the most complex transactions are processed in 180 days and that internal procedures are uniform ..." FCC reviews of some mergers, such as the Bell Atlantic Nynex merger and the SBC Ameritech merger, have taken more than twice this long. Some people have also criticized the FCC for having no rules to guide these reviews.
The release states that "FCC Chairman William Kennard directed FCC General Counsel Christopher Wright to assess the Commission's merger review process."
Christopher Wright has formed a team, headed by Senior Counsel James Bird, which "is developing internal procedures to streamline and accelerate the Commission's merger review process while ensuring consistent public interest analysis. These procedures will ensure that applicants know what is expected of them, what will happen when, and the current status of their application."
Presently, three government agencies have a hand in the telecommunications merger review process: the Federal Trade Commission, the Antitrust Division of the Justice Department, and the Federal Communications Commission. The roles of the FTC and DOJ are expressly stated in statutes. These agencies also proceed more rapidly. The FCC, on the other hand, has authority only to approve the transfer of telecommunications licenses, but has used this authority as though it were a broad grant of antitrust authority. The FCC does have a limited merger review authority under the Clayton Act, which it is not exercising.
Members of the telecommunications industry, investors, analysts, and legislators have complained about many things. Some have argued that FCC merger reviews are taking far too long for the fast moving telecommunications industry. Some have have criticized the FCC for leaking information about the progress of its reviews. Some have criticized the FCC for exercising an authority which it does not possess. Some have criticized the FCC for not adopting rules which define and govern its antitrust merger reviews. Some have criticized the FCC for using the merger review process to extract concessions from telecom companies that have nothing to do with the merger.
| More on Furchtgott-Roth |
| Story: Commissioner Says FCC Extorts Companies with Non-existent Merger Review Authority, 7/23/99. |
| Testimony of Comm. Furchtgott-Roth to the House Judiciary Comm., 5/25/99. |
| Address by Comm. Furchtgott-Roth to the Federalist Society, 7/22/99. |
Some of the criticism is internal. One of the five FCC Commissioners, Harold Furchtgott-Roth, frequently and publicly states that the FCC has no antitrust merger review authority.
There are also many bills pending in the Congress that deal with reviews by the FCC of mergers and acquisitions in the telecommunications industry. At least five would eliminate or restrict the FCC's authority in this area.
Sen. Mike DeWine (R-OH) in sponsoring a bill, S 467, which deals only with the problem of delay. It would require the FCC to act within 180 days of an application in the case of mergers worth $15 Million or more, with a possible 60 day extension. This bill has passed the Senate Judiciary Committee.
| Related Story: Pickering Introduces Bill to Limit Length of FCC Merger Reviews, 8/11/99. |
Rep. Chip Pickering (R-MS) is sponsoring a bill, HR 2783, which would set even shorter limits for the FCC: 60 days (extendable another 30 days) for most mergers, and 45 days for small LECs.
Sen. John McCain (R-AZ) is the sponsor of S 1125, which goes even further. It would all but remove the FCC from the process.
| See, Summary of Bills Pertaining to Telecom Antitrust Merger Reviews in the 106th Congress. |
Rep. Henry Hyde (R-IL) also has a bill, HR 2533, as does Rep. Richard Burr (R-NC), HR 3186.
On the other hand, there are Representatives and Senators who defend the FCC decision to conduct merger reviews involving telecommunications companies. For example, there is Sen. Patrick Leahy (D-VT) and Rep. Tom Sawyer (D-OH).
| James Bird |
| James Bird is now Senior Counsel in the Office of General Counsel at the FCC. He spent the last 20 years at Shea & Gardner, where he worked in administrative, environmental, natural resources, and antitrust law, as well as commercial litigation. He has an A.B. from Princeton, an M.Div. from Harvard, and a J.D. from the University of Chicago. The FCC's General Counsel, Christopher Wright, also previously worked for Shea & Gardner. |
| James Olson |
| James Olsen is a partner with Howrey & Simon. His practice focuses on telecommunications and antitrust matters. He was Chief of the FCC’s Competition Division from 1993 through 1997. He serves as co-chair of the Federal Communications Bar Association Ad Hoc Committee on Telecommunications Competition Issues. He is also Editor-in-Chief of CCH’s Power and Telecom Law Journal. Howrey & Simon has offices at 1299 Pennsylvania Ave. NW, Washington DC. The phone number is 202-783-0800. |
The FCC release also states that the FCC has hired James Bird, formerly an attorney with the Washington DC law firm of Shea & Gardner, to lead the drafting of the FCC's "internal procedures".
"We have some ideas as to how to speed things up," James Bird told Tech Law Journal on January 14. However, first, "we want to meet with members of the bar ... to discuss the merger process, and get feedback from them."
Bird and others from the FCC will meet next Friday with telecommunications and antitrust lawyers. Specifically, they will meet with members of the Federal Communications Bar Association's Ad Hoc Committee on Telecommunications Competition Issues. The meeting is being organized by James Olson of the law firm of Howrey & Simon and Karen Brinkman of the law firm of Latham & Watkins.
Next, James Bird expects that there will be a "public forum, probably within a month of that time."
"Depending on what happens," said Bird, "we would intend to implement the procedures pretty soon after that."
This is not a formal rule making. However, Bird added that we "may put it into a rule making."