IP Democracy: Judge Wants Expert Opinion on Telecom Mergers

Yesterday was a landmark day in telecom antitrust matters — the first judicial proceeding under a revised Tunney Act took place in Washington and the subject was the mega-mergers between AT&T and SBC and Verizon and MCI. The National Journal’s Sarah Lai Stirland has a good write-up here.

Judge Emmet Sullivan of U.S. District Court in Washington is reviewing the mergers to determine whether their approval is warranted. During the hearing, Judge Sullivan complained that he had not been provided with expert reports on the telecommunications marketplace from any party — government or industry.

His basic concern: should he just rely on the findings of the FCC to make his determination.

“The public has to have some confidence in these proceedings,” he added, saying he would not “rubber stamp” the mergers between two of of the former “Baby Bells” — SBC and Verizon — and the long distance carriers, AT&T and MCI.

Judge Sullivan is holding these hearings over the objections of the phone companies involved. His task is to determine whether the mergers, which were approved by the Department of Justice with few conditions attached, took place “in the public interest.”

Some opponents of the combinations are agitating for the judge to decide that antitrust authorities relaxed their own guidelines in approving the deals and that conditions attach to the approvals. The Alliance for Competition in Telecommunications issued a statement yesterday decrying the merger approvals.

The public knows that something was not quite right with the way the government handled these Bell mergers. In its rush to approve these mergers, the DoJ ignored its own merger guidelines and refused to impose a single meaningful condition to protect competition and consumers. And then the current Administration, together with AT&T and Verizon, tried in vain to squelch this independent judicial review.

Few people think that Judge Sullivan will do anything to change the status quo. But this unique set of hearings, the first since the Tunney Act was modified in 2004 to provide a greater role for the judiciary in merger approvals, could lay the groundwork for trouble later on when it comes to antitrust approvals for AT&T’s deal to buy BellSouth.

Posted by Cynthia Brumfield on July 13, 2006 10:20 AM to IP Democracy