WASHINGTON-Over the objections of the panel’s two Democrats, the Federal Communications Commission Thursday voted to eliminate the cellular cross-ownership rules in rural America requiring merging parties to submit to a case-by-case review.
“The majority has failed to provide any real compelling reason for eliminating the rule, instead basing the decision on a determination that the rule should be eliminated because we now have adequate resources and procedures in place to allow for case-by-case review, and somehow the need for flexibility outweighs any concerns about consolidation over cellular spectrum in markets where competitors would go from three to two or two to one. The item completely fails to address some of the concerns raised by previous commissions that justified the rule in the first place, such as market conditions in rural areas and the fact that cellular carriers may still possess market power in these rural service areas. I cannot see how it would ever make sense in rural areas with two wireless providers to let them merge, leaving consumers with only one monopoly choice. But this approach could let this happen,” said FCC Commissioner Jonathan Adelstein.
FCC Chairman Michael Powell, who once served as the chief of staff of the anti-trust division of the Department of Justice, defended eliminating the cellular cross-ownership rule.
“By eliminating the absolute bar against rural cellular cross interests and transitioning to a case-by-case review of rural license transfers, the FCC can more effectively guard against anti-competitive transactions without prohibiting transactions that are in the public interest,” said Powell.
The elimination of the cellular cross-ownership rule was part of a larger set of rules adopted Thursday intended to increase wireless-service availability in rural America.
“In an increasingly mobile world, Americans demand seamless and reliable wireless service,” said Powell. “We are bolstering this objective by enhancing licensees’ financing opportunities, streamlining secondary-market transactions, and encouraging increased competition to advance the interests of rural America.”
But FCC Commission Michael Copps, who had asked the commission to examine wireless availability in rural America, was disappointed.
“Anyone who lives in rural America knows first hand that rural consumers have fewer choices of carriers, more holes in their coverage, and that there are still areas of our country that have no service at all,” said Copps. “I think this item steers us in the wrong direction. We can talk the talk about helping rural America all we want. But someday we’re going to have to walk the walk and get the job done. Today we trip.”
