S 1125 IS, Telecommunications Merger Review Act of 1999.
Re: terminating FCC authority to deny or impose conditions upon license transfers in mergers.
Date introduced: May 26, 1999.
Sponsor: Sen. John McCain (R-AZ).
Source: Library of Congress.

See also, Tech Law Journal Summary of Bills Pertaining to Telecom Antitrust Merger Reviews in the 106th Congress.

To restrict the authority of the Federal Communications Commission to review mergers and to impose conditions on licenses and other authorizations assigned or transferred in the course of mergers or other transactions subject to review by the Department of Justice or the Federal Trade Commission.

IN THE SENATE OF THE UNITED STATES

May 26, 1999

Mr. MCCAIN (for himself, Mr. ASHCROFT, Mr. HATCH, and Mr. MACK) introduced the following bill; which was read twice and referred to the Committee on Commerce, Science, and Transportation

A BILL

To restrict the authority of the Federal Communications Commission to review mergers and to impose conditions on licenses and other authorizations assigned or transferred in the course of mergers or other transactions subject to review by the Department of Justice or the Federal Trade Commission.

Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled,

SECTION 1. SHORT TITLE.

This Act may be cited as the `Telecommunications Merger Review Act of 1999'.

SEC. 2. FINDINGS.

The Congress finds the following:

(1) A stated intent of the Congress in enacting the Telecommunications Act of 1996 was to reduce regulation.

(2) Under existing law, the Department of Justice and the Federal Trade Commission exercise primary authority to review all mergers, including telecommunications industry mergers. The Federal Communications Commission has only limited authority under the Clayton Act to review telecommunications industry mergers.

(3) The Department of Justice and the Federal Trade Commission have extensive expertise in analyzing issues of industry concentration and its effects on competition. The Federal Communications Commission has only limited expertise in analyzing such issues.

(4) Notwithstanding the limitations on its Clayton Act jurisdiction and on its substantive expertise, the Federal Communications Commission exercises broad authority over telecommunications industry mergers pursuant to the nonspecific public interest standard and other provisions in the Communications Act of 1934 that allow it to impose terms and conditions on the assignment and transfer of licenses and other authorizations.

(5) The Federal Communications Commission's exercise of broad authority over telecommunications industry mergers overreaches its intended statutory authority and its substantive expertise and produces delay and inconsistency in its decisions.

(6) Under existing law, parties to a proposed telecommunications industry merger are unable to proceed without the prior approval of the Federal Communications Commission, even if the Department of Justice or the Federal Trade Commission have already approved the merger.

(7) The Federal Communications Commission's existing rulemaking and enforcement prerogatives constitute normal and effective means of assuring that all licensees, including parties to a telecommunications industry merger, operate in the public interest.

(8) The primary jurisdiction and preeminent expertise of the Department of Justice and the Federal Trade Commission on all matters involving industry concentration and its effects on competition, combined with the Federal Communications Commission's existing rulemaking and enforcement prerogatives, make the exercise of separate telecommunications industry merger approval authority by the Federal Communications Commission unnecessary.

(9) Because the duplication of effort, inconsistency, and delay resulting from the Federal Communications Commission's review of telecommunications industry mergers is unnecessary, it imposes unwarranted costs on the industry, on the Commission, and on the public, and it fails to serve the public interest.

SEC. 3. REPEAL OF MERGER APPROVAL AUTHORITY.

Section 11(a) of the Clayton Act (15 U.S.C. 21(a)) is amended by striking `in the Federal Communications Commission where applicable to common carriers engaged in wire or radio communication or radio transmission of energy;'.

SEC. 4. REPEAL OF AUTHORITY TO CONDITION LICENSES, ETC.

(a) BASIC ADMINISTRATIVE AUTHORITY- Section 4(i) of the Communications Act of 1934 (15 U.S.C. 154(i)) is amended by adding at the end thereof the following: `The authority of the Commission to impose terms or conditions on the transfer or assignment of any license or other authorization assigned or transferred in a merger or other transaction subject to review by the Department of Justice or the Federal Trade Commission is subject to section 314.'.

(b) PUBLIC CONVENIENCE AND NECESSITY- Section 214(c) of the Communications Act of 1934 (47 U.S.C. 214(c)) is amended by inserting after `require.' the following: `The authority of the Commission to impose terms or conditions on the transfer or assignment of any such certificate assigned or transferred in a merger or other transaction subject to review by the Department of Justice or the Federal Trade Commission is subject to section 314.'.

(c) Restrictions and Conditions Necessary To Carry Out 1934 Act; Treaties; International Conventions- Section 303(r) of the Communications Act of 1934 (47 U.S.C. 303(r)) is amended by adding at the end thereof the following: `The authority of the Commission under this paragraph to impose terms or conditions on the transfer or assignment of any license or other authority assigned or transferred in a merger or other transaction subject to review by the Department of Justice or the Federal Trade Commission is subject to section 314.'.

(d) ALIEN-OPERATED AMATEUR RADIO STATIONS- Section 310(d) of the Communications Act of 1934 (47 U.S.C. 310(d)) is amended by adding at the end thereof the following: `The authority of the Commission to impose terms or conditions on the transfer or assignment of any authorization issued under this section that is assigned or transferred in a merger or other transaction subject to review by the Department of Justice or the Federal Trade Commission is subject to section 314.'.

(e) PRESERVATION OF COMPETITION IN COMMERCE- Section 314 of the Communications Act of 1934 (47 U.S.C. 314) is amended to read as follows:

`SEC. 314. PRESERVATION OF COMPETITION IN COMMERCE.

`(a) IN GENERAL- Notwithstanding any other provision of law, the Commission has no authority to review a merger or other transaction, or to impose any term or condition on the assignment or transfer of any license or other authorization issued under this Act that is proposed to be assigned or transferred in the course of a merger or other transaction, while that merger or other transaction is subject to review by either the Department of Justice or the Federal Trade Commission.

`(b) COMMUNICATIONS MERGERS PRIMARILY REVIEWABLE BY DOJ AND FTC- The Department of Justice, or the Federal Trade Commission, has primary authority under existing law to review mergers and other transactions involving the proposed assignment or transfer of any license or other authorization issued under this Act. The Commission may file comments in any proceeding before the Department of Justice or the Federal Trade Commission to review a merger or other transaction involving the proposed assignment or transfer of any license or other authorization issued under this Act if those comments reflect the views of a majority of the Commission.

`(c) COMMISSION SHALL IMPLEMENT DOJ OR FTC DECISION WITHOUT ADDITIONAL TERMS OR CONDITIONS- If--

`(1) the Department of Justice or the Federal Trade Commission reviews a merger or other transaction involving the proposed assignment or transfer of any license or other authorization issued under this Act; and

`(2) it issues a written decision of absolute or conditional approval of, or issues a written statement of nonintervention in, the proposed merger or other transaction,

then the Commission shall authorize the assignment or transfer of any license or other authorization involved in the merger or transaction in accordance with the decision, if any, or as proposed, if a written statement of nonintervention is issued. The Commission may not impose any other term or condition on the assignment or transfer of the license or other authorization so assigned or transferred, or impose any other obligation on any party to that merger or transaction.

`(d) Commission Review of Mergers Absent DOJ or FTC Pronouncement-

`(1) IN GENERAL- The Commission may not review any application for assignment or transfer of a license or other authorization issued under this Act in connection with a merger or other transaction unless neither the Department of Justice nor the Federal Trade Commission issues a decision or statement described in subsection (c)(2) in connection with that merger or other transaction.

`(2) 60-day turnaround- The Commission shall conclude any review of a merger or other transaction it may conduct under paragraph (1) within 60 days after the date on which the Department of Justice and the Federal Trade Commission, whichever is appropriate, issues such a decision or statement.

`(3) PRESUMPTION; DEFAULT APPROVAL- In reviewing an application under paragraph (1), the Commission shall apply a presumption in favor of unconditional approval of the application. If the Commission fails to issue a final decision within the 60-day period described in paragraph (2), the application shall be deemed to have been granted unconditionally by the Commission.'.