TESTIMONY OF REPRESENTATIVE DAVID MCINTOSH
ON H.R. 2533, THE "FAIRNESS IN TELECOMMUNICATIONS
LICENSE TRANSFERS ACT"

Thank you, Mr. Chairman, for the opportunity to appear before your committee and testify on H.R. 2533, the "Fairness in Telecommunications License Transfers Act." I applaud Mr. Gekas and Mr. Goodlatte for their leadership in introducing this legislation.

Mr. Chairman, I believe strongly in the free market and the ability of businesses to merge if it will allow them to offer superior products and services, at lower costs to consumers. Government's role should be at best limited -- confined to a timely review of clearly defined criteria. The Federal Communications Commission is not meeting this goal.

The public interest is paramount, but the public interest is clearly not served by a merger approval process with no fixed rules and no fixed timetable. The FCC's apparent inept handling of the SBC-Ameritech merger demonstrated that no one benefits from a merger process which is completely arbitrary.

The problems with the FCC's lack of a standard are manifest. Regulated entities -have little basis for knowing how their applications will be treated. This makes it far too easy for decision makers to discriminate among industries or companies. The lack of clear rules decreases the viability of real judicial review, resulting in the undermining of the statutory right of aggrieved parties.

Finally, without fixed guidelines, the FCC's impartiality will be consistently challenged. I concur with your remarks, Mr. Chairman, that it is difficult to ascertain why the AT&T-TCI license transfer was approved in less than six months while the SBC-Arneritech transaction took a year and a half. That affects competition between these companies and distorts the market place. This process needs an overhaul.

"The Fairness in Telecommunications License Transfers Act" is the right medicine for what's ailing the FCC. This legislation requires the FCC to develop and publish clear and consistent rules that will guide future telecommunications merger decisions. This will alleviate all the problems I mentioned above.

H.R. 2533 is an effort to clarify that the FCC must comply with current law which it is now violating. The Freedom of Information Act requires each agency to "separately state and currently publish in the Federal Register for the guidance of the public ... (C) rules of procedure ...; (D) substantive rules of general applicability formulated and adopted by the agency; and (E) each amendment, revision, or repeal of the foregoing."

Mr. Kennard has defended the FCC's practices, arguing that the Commission's review process is outlined in a GAO report and that there is ample opportunity for aggrieved parties to seek redress through the courts. He states that if the Commission contemplates any rule changes, it will provide opportunity for public comment. But he ignores the fundamental fact that the FCC has no such rules to change! The Administrative Procedure Act plainly states that rules of procedure, substantive rules of general applicability formulated and adopted by an agency and any amendments, revisions or repeals of those rules must be printed in the Federal Register. The FCC is clearly not following the law, and this must change.

In closing, I want to emphasize my strong support for the "Fairness in Telecommunications License Transfers Act." This bill is a great first step toward greater government accountability. I believe our ultimate goal should be to remove the FCC from the decision making process altogether. Let's allow the free market to work.