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The Deal: Republicans Again Seek Limits on FCC Merger Powers

Stocks in this article: CMCSAS

"This is precisely what the transaction review process should not be used for -- backdoor rulemaking," Walden said. He dismissed complaints that the bill is a disguised attempt to take the FCC out of the merger review process entirely by eliminating its unique obligation to review telecom and media mergers for harm to the public interest. Eliminating the public interest authority would leave FCC merger reviews as needless duplicates of the antitrust reviews conducted by the Federal Trade Commission and the Department of Justice. "Despite what you might hear, the bill does not dictate the outcome of a merger review nor alter the public interest standard," Walden said.

However, California's Anna Eschoo, the subcommittee's senior Democrat, said the bill would harm the FCC's merger authority. Fortunately, in her view, the chances of enactment right now are nil.

"The proposed FCC process reform in my view is a backdoor way of gutting some of the FCC's very important authorities," she said. "Congress created the FCC to safeguard the public interest. Consumers need advocates, and competitors and innovators need a referee to level the playing field."

After debating FCC reform to no avail for three straight years, Eschoo said it should be clear the legislation isn't going anywhere. "Instead of working on legislation that creates billable hours for Washington telecom lawyers, we need to work together to craft policies that are actually going to move." Those could include streamlining the FCC's obligations to send reports to Congress and allowing more than two FCC commissioners to meet in private, she said.

Inside the FCC, Walden's bill appears to have some sympathy among its two Republicans. Only last week Republican Commissioner Ajit Pai renewed his call for the commission to codify its largely disregarded 180-day "shot clock" for deciding whether or not to approval a deal. Pai was unhappy the FCC missed its self-appointed deadline for completing its review of Softbank's takeover of Sprint Nextel (S). The FCC approved the companies' revised merger agreement July 5 -- 217 days after their initial application was submitted.

Witnesses called to testify were split over the wisdom of the FCC reform legislation. Larry Downes, an Internet industry analyst and author of several books on the information economy, innovation and the impact of regulation, supported the proposed reforms and said the FCC too often makes unfounded predictions about the direction of technology markets and hinders their natural development. "The FCC must be cured of its addiction to micromanaging markets that are evolving even as the commission's deliberations meander along."

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