The Jeff Pulver Blog: Guest Blogger: Jason Oxman, Managing Director, Law Media Group

« World Series of Poker Game #39 (1c): Table# 59, Seat# 6 – It all starts Here: | Main | Leaving Las Vegas: Busted from the 2006 WSOP Main Event »

July 31, 2006

Guest Blogger: Jason Oxman, Managing Director, Law Media Group

(we welcome contrary thoughts, and hope the Internet-enabled marketplace of ideas will enable the best policy to prevail)

Recent disclosure that AT&T and Verizon cooperated with the federal government in disclosing tens of millions of our private phone records was troubling. Even more troubling was the revelation that the Federal Communications Commission, supposedly an independent regulatory agency, would refuse to even open an investigation in response to thousands of citizen complaints. And as William Black, the Deputy Public Advocate for the State of Maine, wrote recently in the Providence Journal, perhaps the deepest affront to the public is what AT&T and Verizon appear to have received in return - regulatory favoritism, including rapid endorsement of anti-competitive mergers (SBC/AT&T and Verizon/MCI). See http://www.projo.com/opinion/contributors/content/projo_20060703_03ctblack.30b2847c.html.

Until recently, it appeared as if the latest Bell merger-to-monopoly, AT&T's acquisition of BellSouth, would continue that series of favors handed by the federal government to AT&T. Fortunately, this seemingly cozy relationship between the mega-Bells and the Administration hit a speed bump last week - one that AT&T has been trying desperately to squelch. A little-known provision of federal law - the Tunney Act - has thrown wide open for public scrutiny the Administration's failure to abide by the antitrust laws and its sweetheart treatment of AT&T and Verizon. And the Judge in this case has demonstrated his dedication to the law by rejecting a request by the Administration and AT&T/Verizon (yes, the government and Bells are on the same side of the case) that he simply rubber stamp the DoJ's favorable treatment of the Bells.

The Tunney Act was introduced in Congress during the Nixon Administration to prevent the DoJ from making "sweetheart" settlements with powerful corporations. Specifically, the Act (named for Senator John V. Tunney, a Democratic Senator from California who introduced the legislation) was adopted in response to consent decrees that settled three antitrust cases against corporate giant ITT. There was widespread sentiment at the time that the settlements - which were undertaken behind closed doors and outside of public view - were in reality special corporate favors. As such, Congress sought to provide for independent judicial review of decisions by the Department of Justice not to pursue antitrust action against giant corporations. The Tunney Act was introduced by Senator Tunney on February 6, 1973 and signed into law by President Ford on December 21, 1974. The Tunney Act remained largely obscure and unused until developments in 2004 led Congress to enact sweeping changes.

In 2004, the Bush Administration settled its antitrust investigation of Microsoft on terms that many considered extremely favorable to Microsoft and detrimental to the public interest. Congress responded by tightening the Tunney Act to make full judicial review of DoJ settlements mandatory. The legislative history of the 2004 amendments to the Tunney Act reveals that Congress modified the Act because "it would misconstrue the meaning and Congressional intent in enacting the Tunney Act to limit the discretion of district courts to review antitrust consent judgments." In brief, Congress amended the Tunney Act to make a strict, independent review of DoJ's actions compulsory, rather than permissive. Congress accomplished this by changing the word "may" to "shall" before delineating the factors the federal court must use in evaluating DoJ's actions (before the amendments, Congress said the court "may" consider certain factors; post-amendment, the court "shall" consider such factors).

The review of the SBC/AT&T and Verizon/MCI mergers marks the first test case using the recently revised statute. The Tunney Act requires a federal court to determine whether a proposed antitrust settlement is in the "public interest." Under the recent congressional revisions to the Tunney Act, DoJ bears the burden of proving that it satisfied the standards of law applicable to merger review. This is the first time since the Tunney Act was overhauled by Congress in 2004 that a merger challenge has been allowed to go to a hearing. Indeed, it was over the strenuous objections of the government and the merging companies that the judge assigned to the case ordered full briefing and a hearing. Judge Emmet Sullivan of the U.S. District Court for the District of Columbia last week rejected the DoJ/Bell request for a rapid review and instead scheduled additional proceedings and demanded additional evidentiary submissions from the government for his review. Judge Sullivan also granted a request from a coalition of competitive carriers, the New York Attorney General, and the National Association of State Utility Consumer Advocates (NASUCA) for an opportunity to review and respond to the government's evidence.

Even putting aside the enormous impact this judicial proceeding will have on the AT&T/SBC and Verizon/MCI mergers, the impact on the pending merger of AT&T and BellSouth could be even greater. The core claim of petitioners in the Tunney Act case is that DoJ violated its statutory obligation to conduct a thorough review of these mergers, choosing instead to rubber stamp approval. Any remedy ordered by the court in this proceeding would obviously impact the pending review of AT&T's purchase of BellSouth. Moreover, many have even suggested that DoJ's failure to obtain dismissal of this case will have a dramatic impact on the pending review of AT&T/BellSouth because DoJ will be operating under the watchful eye of the court.

The Tunney Act was designed to prevent a cozy relationship between a business-friendly Administration and the giant corporations it is supposed to regulate. The fact that a fair and independent federal judge is reviewing the DoJ's favorable treatment of AT&T and Verizon should give hope to all of us who fear the remonopolization of the telecommunications network. Judge Sullivan may be the only chance we have of bringing this era of Bell favoritism to an end.

Jason Oxman, Managing Director, Law Media Group LLC

Jason Oxman is Managing Director of Law Media Group LLC, specializing in telecommunications law, public policy, and media strategy. Prior to joining LMG in 2006, Oxman was Senior Vice President, Legal and International Affairs, at COMPTEL, the nation’s largest competitive telecommunications trade association. Oxman joined COMPTEL following its merger with ALTS, where he served as General Counsel. Oxman also spent five years as Vice President and Assistant General Counsel at Covad Communications Company. He began his telecommunications career at the Federal Communications Commission, serving as a staff attorney in the Common Carrier Bureau and as Counsel for Advanced Communications in the Office of Plans and Policy. Oxman, a former broadcast journalist, is a cum laude graduate of Amherst College, and holds both a J.D. and a M.S. in Mass Communications from Boston University.

Tags: SBC, Jason OXman, AT&T, FCC

(c) 2006 Jeff Pulver. All Rights Reserved.
(This blog posting is copyright protected by Jeff Pulver. Portions of this blog posting may be quoted or abstracted if attributed.)

Share this post:

Posted by jeff on July 31, 2006 09:49 AM | Permalink

Additional resources: Watch PrimeTime TV Shows | Watch the Jeff Pulver Show | Jeff's Qik Videos

Comments

Posted by: alan at September 18, 2006 06:00 AM

free-magazine-subscription.info

people magazine, newspaper magazine, magazine subscription, star magazine, ls magazine, maxim magazine, entertainment magazine, stuff magazine, time magazine, playboy magazine, king magazine, fitness magazine, pc magazine, us magazine, man magazine, seventeen magazine, hello magazine, free magazine, espn magazine, magazine and e zines, free magazine subscription, free wedding magazine, free magazine and catalog, free bridal magazine, free car magazine

Posted by: link123 at August 2, 2006 07:44 AM

July 31, 2006

Guest Blogger: Jason Oxman, Managing Director, Law Media Group

Comments

Post a comment