JUSTICE, FTC, SENATE STAFFERS TO MEET ON MERGER REVIEW ACCORD

Justice Dept. (DoJ) and FTC officials will meet with Senate staff Wed. to discuss potential delineation of merger review authority between 2 agencies (CD Jan 18 p3). Agreement had been expected to be announced Thurs., but announcement was canceled abruptly. It would give DoJ jurisdiction over media merger reviews, prospect that concerned many consumer advocates. It also concerned Sen. Hollings (D-S.C.), along with secretive nature in which agreement was negotiated, Hollings aide said. By virtue of being chmn. of both Senate Commerce Committee and Appropriations Commerce Subcommittee on Justice, State and Judiciary, Hollings has congressional oversight of both agencies, aide said.

Hollings staff worried that change in structure of merger reviews could affect Justice budget, which would require congressional consultation, aide said. Both agencies will meet with staffs of both committees, aide said. DoJ said it “strongly supports the proposed realignment of industry sectors regarding antitrust clearance” because it “would provide greater certainty and efficiency than the current process.” It said meeting would be attempt to resolve questions “so that we may implement the proposed agreement as soon as possible.”

DoJ told Hill staffers change wouldn’t affect the department’s budget, aide said: “If that’s the case, it will be a short meeting.” Failure to consult Congress about agreement concerned Hollings, aide said. FTC commissioners also were upset about behind-the-scenes deal. Comr. Mozelle Thompson said he didn’t receive copy of agreement until shortly before Chmn. Timothy Muris executed it.

Hollings, like Thompson, also was concerned about FTC losing oversight of media mergers, aide said. Hollings has been worried about consolidation of media enterprises for long time, but aide said he believed FTC had done good job of reviewing mergers, including recent AOL acquisition of Time Warner. “Hollings believes the FTC has done excellent work on mergers in the past,” aide said: “The agency is both independent and diverse.” Consumer advocates echoed that sentiment, saying they had rapport with FTC that wasn’t present with Justice. Center for Digital Democracy Exec. Dir. Jeff Chester said DoJ wouldn’t consider effect content market has on democracy when reviewing media mergers.

FTC Comr. Sheila Anthony said she was concerned by “absolute ceding of all cable, media and entertainment matters to the Justice Department” in proposal that was pulled officially. In statement that she had planned to release Thurs. with original announcement, but chose to release anyway “in the interest of sharing my views first- hand,” she said she supported efforts to consolidate 2 agencies’ efforts, but “broadband Internet access and the technologies and content associated with it are likely to become a growth engine for the U.S. economy over the next several years.” Anthony said FTC had handled AOL takeover of Time Warner and had ability to conduct workshops, roundtables and use administrative litigation process, which she said were well-suited to such deals. Proposed policy “explicitly leaves ‘convergence’ matters open to further sorting out by the 2 agencies,” she said, approach that should include cable, media and entertainment.

Comrs. Orson Swindle and Thomas Leary said in joint statement “we can hardly find the words to express our disappointment” at withdrawal of compromise. Streamlining “would have represented a major advance in the rationality, predictability and speed with which the agencies divide their workload,” the said. In reference to those at FTC objecting to ceding cable, media and entertainment, Swindle and Leary said “it is very likely… that some in [DoJ] are upset that significant matters like electricity and health care would be ceded to the Commission.” Trade-offs on issues where both agencies had strengths “will continue in the future without the signed agreement, only in a far less efficient and transparent way.”