Sen. McCain
	Sen. Hatch
	Sen. Ashcroft

Press Release of Senators John McCain, Orrin Hatch, and John Ashcroft.
Re: Introduction of S 1125, the Telecommunications Merger Review Act.
Date: May 26, 1999.
Source: Office of Sen. John McCain.

McCAIN, HATCH, ASHCROFT BILL TO STREAMLINE FEDERAL REVIEW OF TELECOM MERGERS (S.1125)

WASHINGTON, D.C. --Senators John McCain (R-AZ), Chairman of the Committee on Commerce, Science, and Transportation, Orrin Hatch (R-UT), Chairman of the Judiciary Committee, and John Ashcroft (R-MO) today introduced a bill (S.1125) to make the government's review of telecommunications industry mergers more coherent and effective.

"It seems like hardly a week goes by without the announcement of yet another precedent-setting merger in the telecommunications industry," Senator McCain said. "The urgent need for competence and clarity in reviewing telecom mergers highlights a glaring problem of bureaucratic mismanagement in our system that translates into higher costs for consumers. This bill streamlines the way the federal government reviews telecom mergers and still safeguards the public interest."

"I look forward to our Committees working in such a mutually cooperative manner on this and other related issues," Senator Hatch said. "It is time we addressed this issue, given the increasing level of merger activity in the communications industry, and the ever increasing importance of telecommunications services in our society, whether it is telephone or Internet services."

"Continued growth of the telecommunications industry is crucial if America is to stay competitive in a world marketplace. But the current regulatory structure does nothing to protect consumers. Instead it merely feeds the bureaucracy in Washington. We must create a regulatory environment that allows industry to flourish and provide benefits to the economy in the form of new jobs, investment, exports, and lower prices for consumers," Senator Ashcroft said.

The Telecom Merger Review Act mandates that if either the Department of Justice (DOJ) or the Federal Trade Commission (FTC) has reviewed a proposed telecommunications merger, and stated in writing either approval or no intent to intervene, the Federal Communications Commission (FCC) must follow the determination of these expert agencies and transfer any licenses without further delay. The FCC would be permitted to file comments in DOJ or FTC merger review proceedings.

The FCC may only review proposed mergers when neither the DOJ nor FTC has stated in writing that it either approves the merger or intends to intervene. Because DOJ and FTC review all mergers, their silence on a particular merger presupposes that the merger would be either inconsequential or nonproblematic. Therefore, FCC review of mergers in such cases is subject to a strict 60-day deadline, and the FCC is directed to presume approval without attaching further conditions or obligations on any of the parties.

"When it comes to assuring that the interests of consumers and competitors are protected, there is no reason why the FCC should not follow the expert agencies' lead. We need to restore integrity and professionalism to federal review of telecom industry mergers by setting up an efficient system without needless duplication," McCain said.

The FCC typically re-reviews proposed mergers, even after DOJ or FTC has already approved them. Separate FCC review of mergers typically adds months to the process and millions of dollars in costs. For example, even though DOJ has already completed its own review of the proposed SBC-Ameritech merger and approved it with minimal conditions, and even though the FCC has compiled its own written record consisting of over 55,000 pages, the FCC has withheld a decision and continues to review its own extensive list of conditions. In the meantime, public comments by FCC staff on the merits of the merger drove the value of SBC and Ameritech stock down over $4 billion.

The DOJ and FTC have extensive expertise in analyzing the competition-related issues that are involved in mergers. The FCC has comparatively little expertise in these issues and only limited authority under the law. The FCC has used its license transfer authority under the generic "public interest" standard to boost its role in the merger review process.

The Telecom Merger Review Act of 1999, would do nothing to change the authority that the DOJ and FTC currently have to review all telecommunications industry mergers, nor would it interfere with the FCC's existing rulemaking or enforcement authority.