WASHINGTON-House telecommunications subcommittee Chairman Billy Tauzin (R-La.), backed by several key Democrats, last week unveiled draft legislation to rein in merger review practices of the Federal Communications Commission.
The draft bill, drawing on separate bills by Reps. Chip Pickering (R-Miss.) and Richard Burr (R-N.C.), comes in response to complaints by Tauzin and others that FCC merger reviews are inconsistent, take too long, duplicate the work of the Justice Department and Federal Trade Commission, and encourage corruption in the form of shakedowns and greenmail.
Tauzin considers the draft bill the first step in a more ambitious plan to overhaul the FCC. Tauzin believes he can get the FCC merger review bill through Congress this year, but concedes FCC reform will have to wait until 2001.
“The commission is clearly abusing its authority to have a hand in all the excitement,” said Tauzin at last Tuesday’s hearing. The draft bill mandates FCC action within 90 days for large mergers and 60 days for smaller, less-complicated telecom acquisitions.
FCC Chairman William Kennard, who did not testify because he was travelling overseas, has challenged Tauzin to produce evidence of corruption.
But criticism of FCC merger review procedures is not just coming from Capitol Hill and industry. FCC member Harold Furchtgott-Roth, a Republican, repeated his oft-stated complaint that the “Commission all too often places conditions on license transfers that have no basis on the text of the Communications Act.”
Indeed, Furchtgott-Roth testified he believes deals that involve proposed telecom mergers under review by the FCC are being cut between bureau staff and industry lobbyists.
In recent years, many of the telecom mega-mergers have involved massive transfers of wireless licenses.
But as tough as Tauzin has been on the FCC, the harshest criticism during the hearing came from the top Democrat of the House Commerce Committee. No less than a half-dozen times did John Dingell inject the word “extortion” or some variation thereof in slamming FCC merger review practices.
“The FCC has done something I regard as serious,” said Dingell. The hulking Michigan Democrat said the FCC identifies a pet issue and gets it addressed through concessions by parties to proposed mergers. “Rarely such a nexus exists,” said Dingell.
In addition to Dingell, Reps. Rick Boucher (D-Va.) and Ron Klink (D-Penn.) have signed on as cosponsors of the “Telecommunications Merger Act of 2000.”
Rep. Ed Markey (D-Mass.), ranking minority member of the House telecommunications subcommittee, signaled he will oppose the FCC merger review measure.
“I do not support eviscerating the FCC public interest standard because it is inconvenient for media moguls,” said Markey. Markey and Kennard insist that FCC merger review must include a finding that a given telecom deal is in the public interest, a standard some see as overly broad, ill-defined and fertile ground for political manipulation.
Tauzin is expected to move swiftly on the bill, with a subcommittee markup likely in April.
“We’re not going to let any grass grow between our toes,” said Ken Johnson, Tauzin’s spokesman.
