WASHINGTON — The road to media mergers got a new map on Tuesday: Toss those directions to the Federal Trade Commission and head straight to the U.S. Dept. of Justice for review.
In an unprecedented overhaul of the way Washington reviews corporate mergers for antitrust violations, the FTC will no longer ride herd over proposed media and entertainment unions. Rather, Attorney General John Ashcroft’s DOJ has just assumed full-time duty.
Plan was announced at a noon news conference by FTC topper Timothy Muris and Asst. Attorney General Charles James, who heads the antitrust division. The duo abruptly called off the same announcement in January after a top Capitol Hill solon strongly objected to removing the bipartisan, independent FTC from the loop when it comes to media matters.
Since 1948, the two agencies have divvied up various corporate mergers on a piecemeal basis. After an initial clearance review by each, one or both exert jurisdiction. Last year, for example, it was the FTC that signed off on the AOL Time Warner deal, not long after the DOJ studied the Viacom/CBS deal.
Muris and James said the old system had become bogged down by infighting between the FTC and DOJ, and that it makes more sense to divide up various industries from the outset. The DOJ gets sectors including media/entertainment, aeronautics, mining, missiles, photography and film, while the FTC gets autos and trucks, energy, grocery stores and pharmaceuticals.
“This agreement has enormous benefit for both agencies, and for the public,” Muris said.
“If Charles and I weren’t such good friends, this would have been very hard to do,” he added.
Keeping track of biz
The restructuring will allow the DOJ, for instance, to assign specific staff to track the media/entertainment biz.
But Sen. Ernest Hollings (D-S.C.), chair of the Senate Commerce Committee, was hardly mollified, saying the FTC-DOJ pact should have been cleared by Congress. It was Hollings who initially objected to the restructuring, dispatching his staffers to meet with reps for the two agencies.
“For some reason, this administration doesn’t like government. We have yet to receive anything in black-and-white,” Hollings said. “We were in the middle of discussions on how to proceed, and they just moved forward on their own. It’s a tricky way to forgo consultation. We have our tricks, too.”
Muris and James said it was well within their authority to sign off on the restructuring, and that no congressional action was needed. They also made public letters from other key lawmakers who support the new arrangement, including Sen. Mike DeWine (R-Ohio), Sen. Orrin Hatch (R-Utah) and Sen. Herb Kohl (D-Wis.).
Hollywood lobbyists said they weren’t alarmed by the plan, and that both agencies have expertise.
Like Hollings, though, consumer advocates say the public is better served by an FTC review, since the regulatory agency is governed by a five-member, bipartisan commission.
DOJ, on the other hand, has a direct line to the White House. Ashcroft was President Bush’s pick.
“Given the Bush administration’s apparent support for massive media deregulation, one can only surmise that today’s announcement sends a strong signal to big special interests that they will get easy treatment,” Center for Digital Democracy director Jeffrey Chester said.
Yet FTC topper Muris also was a Bush pick, with the Republicans holding a majority on the commission.
The two major media/entertainment mergers on the table — Comcast/AT&T Broadband and EchoStar/DirecTV — had already been assigned to the DOJ before Tuesday’s restructuring announcement.
Media/entertainment mergers also must be cleared by the Federal Communications Commission, which conducts its own independent investigation.