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TheStreet Open House

The Deal: Republicans Again Seek Limits on FCC Merger Powers

Downes contrasted the approaches of the Department of Justice Antitrust Division and the FCC when they approved the 20008 merger of XM Satellite Radio and Sirius Satellite Radio.

The DOJ issued a four-page closing statement that "sensibly found new forms of competition will be more than enough to discipline the combined entity, and DOJ has been found abundantly correct," Downes said. "By contrast, the FCC took 17 months and a 100-plus page order laden with conditions to reach the same conclusion."

Former FCC Commissioner Robert McDowell, now a visiting fellow at the Hudson Institute, also supported the legislation. He said lawmakers might want to consider a statutory requirement forcing the FCC when using its public interest authority to justify every transaction condition first and then tailor any condition narrowly. "Put another way, the commission may set a condition to cure a harm only after a meaningful economic analysis demonstrates that the merger will cause harm to consumers," he said. "Conditions impose costs on transactions that are ultimately borne by consumers. Keeping conditions streamlined to address merger specific problems would reduce costs to consumers and help spur market activity."

Witnesses against the legislation included Richard J. Pierce Jr., an expert in federal administrative procedures at the George Washington University Law School, who said legislation would impose too many burdens on the FCC to justify its rules. The end result would be to drag out FCC rulemakings even more, he said .

Stuart Minor Benjamin, a telecommunications law and First Amendment expert at Duke University's law school, said that the new FCC standards would "lack either agency or judicial precedents" and would be subject to judicial review. "This will likely open the door to years of litigation and uncertainty," he said.

Written by Bill McConnell

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