WASHINGTON-Sen. Ernest Hollings (D-S.C.), top Democrat on the Senate Commerce Committee, last week signaled his opposition to Justice Department antitrust nominee Joel Klein and added to growing congressional concern about how he will scrutinize telecommunications mergers allowed under the 1996 telecom act.
“The telecom act is meant to promote competition, not consolidation,” said Maury Lane, a spokesman for Hollings. “Until Mr. Klein proves that he believes in competition, Mr. Hollings is not inclined to remove the hold” on the nomination. Hollings, noted Lane, believes Klein “has been misreading the telecommunications act.”
Hollings, who met with Klein last Tuesday, is the second high-profile telecom lawmaker to come out publicly against the Klein nomination in recent weeks.
Conrad Burns (R-Mont.), chairman of the Senate communications subcommittee, asked Senate Majority Leader Trent Lott (R-Miss.) on May 15 to put a hold on the Klein appointment.
But for much different reasons than Hollings.
While Hollings fears Klein will be lax in enforcing antitrust law when huge telecom mergers come his way, Burns worries the nominee will be too strict in deciding whether to allow regional Bell companies into the long-distance market.
Klein signed off on the unconditional approval of the $21 billion merger between Bell Atlantic Corp. and Nynex Corp. recently. That drew the ire of ranking Sen. Patrick Leahy (D-Vt.), ranking minority member of the Senate Judiciary Committee, during an otherwise smooth confirmation hearing in late April. Leahy pressed Klein on why he did not impose conditions on the Bell Atlantic-Nynex transaction as several New England states did. Klein said state and federal law differed on the threshold for merger approval.
Conditions for allowing the seven Bells, which largely control the $100 billion local telco market, into the $70 billion long-distance market was the bloody battleground of the 1995 telecom debate.
Just last month, Klein-who left the White House to be acting Justice antitrust czar after Anne Bingaman joined No. 6 long-distance carrier LCI International Inc. as a lobbyist-urged the Federal Communications Commission against allowing SBC Communications Inc. to offer long-distance service in Oklahoma because the company had not opened its local market to competition.
“We’re confident we will be able to resolve any outstanding issues,” said Gina Talamona, a Justice Department spokeswoman.
Klein finds himself in a precarious position. He is being browbeat on one side by a Senate Democrat who believes in traditional government regulation as a check against anticompetitive activity and on the other side by a GOP telecom subcommittee chairman who leans toward deregulation.
