II

106TH CONGRESS

1ST SESSION S. 1125

To restrict the authority of the Federal Communications Commission to

review mergers and to impose conditions on licenses and other authorizations assigned or transferred in the course of mergers or other transactions subject to review by the Department of Justice or the Federal

Trade Commission.

IN THE SENATE OF THE UNITED STATES

MAY 26, 1999

Mr. MCCAIN (for himself, Mr. ASHCROFT, Mr. HATCH, and Mr. MACK) introduced the following bill; which was read twice and referred to the Committee on Commerce, Science, and Transportation

A BILL

To restrict the authority of the Federal Communications

Commission to review mergers and to impose conditions

on licenses and other authorizations assigned or transferred in the course of mergers or other transactions

subject to review by the Department of Justice or the

Federal Trade Commission.

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled,

3 SECTION 1. SHORT TITLE.

4 This Act may be cited as the ‘‘Telecommunications

5 Merger Review Act of 1999’’.
2

•S 1125 IS

1 SEC. 2. FINDINGS.

2 The Congress finds the following:

3 (1) A stated intent of the Congress in enacting

4 the Telecommunications Act of 1996 was to reduce

5 regulation.

6 (2) Under existing law, the Department of Jus7 tice and the Federal Trade Commission exercise pri8 mary authority to review all mergers, including tele9 communications industry mergers. The Federal

10 Communications Commission has only limited au11 thority under the Clayton Act to review tele12 communications industry mergers.

13 (3) The Department of Justice and the Federal

14 Trade Commission have extensive expertise in ana15 lyzing issues of industry concentration and its ef16 fects on competition. The Federal Communications

17 Commission has only limited expertise in analyzing

18 such issues.

19 (4) Notwithstanding the limitations on its Clay20 ton Act jurisdiction and on its substantive expertise,

21 the Federal Communications Commission exercises

22 broad authority over telecommunications industry

23 mergers pursuant to the nonspecific public interest

24 standard and other provisions in the Communica25 tions Act of 1934 that allow it to impose terms and
3

•S 1125 IS

1 conditions on the assignment and transfer of licenses

2 and other authorizations.

3 (5) The Federal Communications Commission’s

4 exercise of broad authority over telecommunications

5 industry mergers overreaches its intended statutory

6 authority and its substantive expertise and produces

7 delay and inconsistency in its decisions.

8 (6) Under existing law, parties to a proposed

9 telecommunications industry merger are unable to

10 proceed without the prior approval of the Federal

11 Communications Commission, even if the Depart12 ment of Justice or the Federal Trade Commission

13 have already approved the merger.

14 (7) The Federal Communications Commission’s

15 existing rulemaking and enforcement prerogatives

16 constitute normal and effective means of assuring

17 that all licensees, including parties to a tele18 communications industry merger, operate in the

19 public interest.

20 (8) The primary jurisdiction and preeminent ex21 pertise of the Department of Justice and the Fed22 eral Trade Commission on all matters involving in23 dustry concentration and its effects on competition,

24 combined with the Federal Communications Com25 mission’s existing rulemaking and enforcement pre-
4

•S 1125 IS

1 rogatives, make the exercise of separate tele2 communications industry merger approval authority

3 by the Federal Communications Commission unnec4 essary.

5 (9) Because the duplication of effort, inconsist6 ency, and delay resulting from the Federal Commu7 nications Commission’s review of telecommunications

8 industry mergers is unnecessary, it imposes unwar9 ranted costs on the industry, on the Commission,

10 and on the public, and it fails to serve the public in11 terest.

12 SEC. 3. REPEAL OF MERGER APPROVAL AUTHORITY.

13 Section 11(a) of the Clayton Act (15 U.S.C. 21(a))

14 is amended by striking ‘‘in the Federal Communications

15 Commission where applicable to common carriers engaged

16 in wire or radio communication or radio transmission of

17 energy;’’.

18 SEC. 4. REPEAL OF AUTHORITY TO CONDITION LICENSES,

19 ETC.

20 (a) BASIC ADMINISTRATIVE AUTHORITY.—Section

21 4(i) of the Communications Act of 1934 (15 U.S.C.

22 154(i)) is amended by adding at the end thereof the fol23 lowing: ‘‘The authority of the Commission to impose terms

24 or conditions on the transfer or assignment of any license

25 or other authorization assigned or transferred in a merger
5

•S 1125 IS

1 or other transaction subject to review by the Department

2 of Justice or the Federal Trade Commission is subject to

3 section 314.’’.

4 (b) PUBLIC CONVENIENCE AND NECESSITY.—Sec5 tion 214(c) of the Communications Act of 1934 (47

6 U.S.C. 214(c)) is amended by inserting after ‘‘require.’’

7 the following: ‘‘The authority of the Commission to impose

8 terms or conditions on the transfer or assignment of any

9 such certificate assigned or transferred in a merger or

10 other transaction subject to review by the Department of

11 Justice or the Federal Trade Commission is subject to sec12 tion 314.’’.

13 (c) RESTRICTIONS AND CONDITIONS NECESSARY TO

14 CARRY OUT 1934 ACT; TREATIES; INTERNATIONAL CON15 VENTIONS.—Section 303(r) of the Communications Act of

16 1934 (47 U.S.C. 303(r)) is amended by adding at the end

17 thereof the following: ‘‘The authority of the Commission

18 under this paragraph to impose terms or conditions on the

19 transfer or assignment of any license or other authority

20 assigned or transferred in a merger or other transaction

21 subject to review by the Department of Justice or the Fed22 eral Trade Commission is subject to section 314.’’.

23 (d) ALIEN-OPERATED AMATEUR RADIO STATIONS.—

24 Section 310(d) of the Communications Act of 1934 (47

25 U.S.C. 310(d)) is amended by adding at the end thereof
6

•S 1125 IS

1 the following: ‘‘The authority of the Commission to impose

2 terms or conditions on the transfer or assignment of any

3 authorization issued under this section that is assigned or

4 transferred in a merger or other transaction subject to re5 view by the Department of Justice or the Federal Trade

6 Commission is subject to section 314.’’.

7 (e) PRESERVATION OF COMPETITION IN COM8 MERCE.—Section 314 of the Communications Act of 1934

9 (47 U.S.C. 314) is amended to read as follows:

10 ‘‘SEC. 314. PRESERVATION OF COMPETITION IN COM11 MERCE.

12 ‘‘(a) IN GENERAL.—Notwithstanding any other pro13 vision of law, the Commission has no authority to review

14 a merger or other transaction, or to impose any term or

15 condition on the assignment or transfer of any license or

16 other authorization issued under this Act that is proposed

17 to be assigned or transferred in the course of a merger

18 or other transaction, while that merger or other trans19 action is subject to review by either the Department of

20 Justice or the Federal Trade Commission.

21 ‘‘(b) COMMUNICATIONS MERGERS PRIMARILY RE22 VIEWABLE BY DOJ AND FTC.—The Department of Jus23 tice, or the Federal Trade Commission, has primary au24 thority under existing law to review mergers and other

25 transactions involving the proposed assignment or transfer
7

•S 1125 IS

1 of any license or other authorization issued under this Act.

2 The Commission may file comments in any proceeding be3 fore the Department of Justice or the Federal Trade Com4 mission to review a merger or other transaction involving

5 the proposed assignment or transfer of any license or

6 other authorization issued under this Act if those com7 ments reflect the views of a majority of the Commission.

8 ‘‘(c) COMMISSION SHALL IMPLEMENT DOJ OR FTC

9 DECISION WITHOUT ADDITIONAL TERMS OR CONDI10 TIONS.—If—

11 ‘‘(1) the Department of Justice or the Federal

12 Trade Commission reviews a merger or other trans13 action involving the proposed assignment or transfer

14 of any license or other authorization issued under

15 this Act; and

16 ‘‘(2) it issues a written decision of absolute or

17 conditional approval of, or issues a written state18 ment of nonintervention in, the proposed merger or

19 other transaction,

20 then the Commission shall authorize the assignment or

21 transfer of any license or other authorization involved in

22 the merger or transaction in accordance with the decision,

23 if any, or as proposed, if a written statement of non24 intervention is issued. The Commission may not impose

25 any other term or condition on the assignment or transfer
8

•S 1125 IS

1 of the license or other authorization so assigned or trans2 ferred, or impose any other obligation on any party to that

3 merger or transaction.

4 ‘‘(d) COMMISSION REVIEW OF MERGERS ABSENT

5 DOJ OR FTC PRONOUNCEMENT.—

6 ‘‘(1) IN GENERAL.—The Commission may not

7 review any application for assignment or transfer of

8 a license or other authorization issued under this

9 Act in connection with a merger or other transaction

10 unless neither the Department of Justice nor the

11 Federal Trade Commission issues a decision or

12 statement described in subsection (c)(2) in connec13 tion with that merger or other transaction.

14 ‘‘(2) 60-DAY TURNAROUND.—The Commission

15 shall conclude any review of a merger or other trans16 action it may conduct under paragraph (1) within

17 60 days after the date on which the Department of

18 Justice and the Federal Trade Commission, which19 ever is appropriate, issues such a decision or state20 ment.

21 ‘‘(3) PRESUMPTION; DEFAULT APPROVAL.—In

22 reviewing an application under paragraph (1), the

23 Commission shall apply a presumption in favor of

24 unconditional approval of the application. If the

25 Commission fails to issue a final decision within the
9

•S 1125 IS

1 60-day period described in paragraph (2), the appli2 cation shall be deemed to have been granted uncon3 ditionally by the Commission.’’.

Æ