Sen. Ernest Hollings is holding up Joel Klein’s nomination to head the Justice Department’s antitrust division because Hollings thinks Klein can’t read-at least as far as deciphering the Telecommunications Act of 1996. Hollings claimed Klein interpreted the telecom act wrong because Klein didn’t impose any restrictions on the merger between Bell Atlantic and Nynex. A Hollings aide said the telecom act was about competition, not consolidation.
In his defense, Klein said there are no federal provisions included in the telecom act that would have allowed him to impose restrictions on the Bell Atlantic Nynex merger.
Sen. Ernest Hollings is the ranking Democrat on the Senate Commerce Committee. As such, he wields much power on Capitol Hill. He makes laws.
Joel Klein also is powerful, but he is limited in that he only enforces laws. He doesn’t write them.
A total of 505 members of Congress voted in favor of the telecom act of 1996. Twenty-one in Congress voted against it.
The telecom act of 1996 was supposed to open the floodgates of competition.
When it was passed, many a congressman released broad statements on how this law would bring added competition to the U.S. marketplace as cable companies would rush to offer telephony services and telecom companies would usher in cable offerings as part of their menu.
Never mind that the Bell companies already had shied away from their video-over-dial-tone trials. Or that cable companies no longer touted the benefits of cable-based telephony service. The largest of the PCS auctions already had ended when Congress passed the telecom act, and only TCI, Comcast and Cox showed any interest in cable-based PCS.
It seems Hollings is forgetting that Congress can only set up the parameters for change, it cannot guarantee that a certain vision of that change will be carried out.
Consolidation is allowed under the telecom law, witness the many intelligent people in industry that found the new law would let Pacific Telesis merge with SBC Communications, and that it would enable Bell Atlantic to take over Nynex, and that radio station buyouts would be endorsed under the new law.
If Sen. Hollings does not approve of the effects the Telecommunications Act of 1996 is having on the American public, he should offer an amendment to the act. Joel Klein is not the problem-or the solution.
