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Inside Move: AOL TW’s merger ire lingers

Too risky to challenge FCC, conglom lawyer sez

WASHINGTON — According to AOL Time Warner general counsel Paul Cappuccio, the Federal Communications Commission is downright un-American when it comes to merger review.

Apparently still smarting over a litany of conditions imposed by the FCC in exchange for approving the marriage of AOL and Time Warner, Cappuccio got to tell FCC chairman Michael Powell just how he felt at a confab Wednesday on antitrust law.

Cappuccio said it would have been too risky to challenge the FCC, blaming an inefficient appeals process. The playing field was much more level when it came to the Federal Trade Commission, since AOL Time Warner had the clear choice of fighting the FTC’s merger conditions in court, he said.

“The FTC process is very healthy, very American,” Cappuccio said.

Then again, Cappuccio said the FCC was harmless compared to the European Union’s antitrust watchdog agency, which ultimately forbade AOL Time Warner from buying certain overseas interests if it wanted the EU’s merger blessing.

“Who do you apply to there? The intergalactic court of justice?” Cappuccio said.

Powell, who was only an FCC commissioner when AOL Time Warner merged in early January, didn’t much disagree with Cappuccio. He said administrative law judges — which would first handle any appeal — probably couldn’t cope with the complexity of the largest media merger in history.

“It’s like being committed to purgatory,” said Powell. “You’ll be there the better part of your life.”

About the only one rushing to defend the FCC was antitrust lawyer Richard Parker, who handled the AOL Time Warner merger for the FTC. He said the orgs’ staffs worked closely with each other while covering different issues.

“I thought (the FCC was) making a positive contribution,” said Parker, who recently left the FTC for a gig in the Washington office of L.A.-based O’Melveny & Myers.

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