House Passes Curbs on FCC Power to Set Merger Conditions

The Republican-controlled House of Representatives passed legislation that would limit the Federal Communications Commission’s authority to pursue concessions from companies seeking approval to merge.

The measure won approval yesterday in a largely party-line vote, 247-174, over objections from President Barack Obama’s administration. Under the bill, the FCC would be barred from imposing or accepting conditions on companies that aren’t related to a proposed merger.

“They hold you hostage,” Representative Greg Walden, an Oregon Republican, said of the commission while speaking in favor of the bill on the House floor. “This is good, solid government-reform legislation.”

A House Energy and Commerce Committee report accompanying the bill said the FCC has sought concessions that are outside of its authority to approve mergers, and that companies have proposed unrelated concessions to try to improve their chances of gaining agency consent.

For example, Comcast Corp. (CMCSA), the largest U.S. cable company, voluntarily agreed last year to follow Internet-traffic rules set by the FCC as it sought agency approval to buy NBC Universal.

The bill would require the commission to conduct a detailed survey of the communications industry before making decisions that could increase costs for businesses or consumers.

The agency would have to “identify a market failure or consumer harm and conduct a cost-benefit analysis” before adopting rules with an economic impact of more than $100 million, the report said.

Opposed by Democrats

Democrats including Henry Waxman of California opposed the bill and said it wouldn’t be considered by the U.S. Senate.

“This is not process reform but a fundamental assault on the FCC’s authority to protect the public interest,” said Waxman, the senior Democrat on the Energy and Commerce committee.

The Senate has no plans to take up the measure, Jena Longo, a spokeswoman for Senator Jay Rockefeller, the West Virginia Democrat who is chairman of the Senate Commerce Committee, said in an e-mail.

The Obama administration opposes the bill, according to a statement from the Office of Management and Budget. The legislation “would limit the ability of the Federal Communications Commission to exercise its statutory duty to protect the public interest in its review of transactions affecting the vital communications industry,” according to the OMB.

‘Public Interest’

The administration said the bill could limit the ability of the FCC and the Justice Department to work together on telecommunications matters. The measure doesn’t further the administration’s goals of ensuring that agency decisions are “open, transparent, well-founded, and protective of the public interest,” according to the statement.

Neil Grace, an FCC spokesman, declined to comment.

House Republicans and Democrats adopted several amendments before the bill’s passage. An amendment from Representative Mario Diaz-Balart, a Florida Republican, would make the FCC’s handling of freedom of information requests more transparent.

Another amendment, from Representative Al Green, a Texas Democrat, clarifies that the FCC would not be impeded from notifying the public during emergencies.

To contact the reporter on this story: Chris Strohm in Washington at cstrohm1@bloomberg.net

To contact the editor responsible for this story: Katherine Rizzo at krizzo5@bloomberg.net

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