WASHINGTON-Antitrust policy is adapting to sweeping pro-competitive, deregulatory telecommunications reforms mandated by Congress, but not abandoning traditional oversight safeguards, one of the nation’s top regulators said.
The Federal Trade Commission, the Department of Justice and the Federal Communications Commission are all shifting their missions, noted FCC Chairman Reed Hundt at a conference last week. Hundt used the speech as a platform to blast local telephone companies and state regulators that won a stay of interconnection rules in a St. Louis federal appeals court two weeks ago.
Hundt, a former antitrust lawyer, qualified his remarks by saying antitrust policy changes contemplated by the agencies will not necessarily lead to a wholesale departure from “customary, orthodox views about economics and communications policy.
“What’s unorthodox about these views is the application of them to the communications sector,” said Hundt.
Indeed, there is early evidence of such a shift at FTC, where Chairman Robert Pitofsky has proposed putting more emphasis on consumer cost savings in antitrust analysis as part of a broad review.
Anne Bingaman, the Clinton administration’s trustbuster who recently left the Justice Department for a fellowship at the Brookings Institution, gave the green light on various telecom mergers but only after modifications and restructuring were agreed to by the parties. Her successor, Joel Klein, has been characterized as lacking the same activist zeal.
The Justice Department’s big focus today is massive consolidation in the radio broadcast market, an economic shift driven by relaxed ownership limits.
It remains unclear just how antitrust policy will evolve when consolidation appears to be outpacing the kind of vibrant competition promised by those who crafted telecommunications reform legislation.
Four of the seven Baby Bells are ready to join forces: Pacific Telesis Group wants to team with SBC Communications Inc., and Nynex Corp. and Bell Atlantic Corp. have designs on teaming in the Mid Atlantic and New England regions. Both deals are under federal antitrust examination.
It is probably too early to judge whether the 1996 Telecom Act will inject competition into the monopoly local telephone market or whether the seven regional Bells that control that market will give AT&T Corp., MCI Communications Corp. and Sprint Corp. a run for their money in the long-distance arena.
The paging, mobile telephone and dispatch radio sectors, though competitive to varying degrees, are consolidating even as the overall markets expand.
Nextel Communications Inc.’s proposed $159 million buyout of Pittencrieff Communications Inc. is the best example of that trend.
Antitrust officials will have to decide whether Nextel is a threat to local dispatch or whether the firm is just another mega-wireless carrier with marginal impact at the local level.
While Paging Network Inc. dominates the paging business, there still is healthy competition in many markets. But it is getting harder for small- and medium-sized paging operators to match PageNet’s bargain basement rates.
The infusion of 120 megahertz of personal communications services spectrum strongly implies new competition for the cellular duopoly in each town. But the top cellular service providers – AT&T and the Baby Bells – also are the major PCS licensees.
The 45 megahertz spectrum cap is the only check to keep any one wireless telephony carrier from usurpring individual markets. Some new entrants like NextWave Telecom Inc. could bring more action to pocket tlephone service competition, but even that is possible only because the firm has the mighty marketing muscle of MCI behind it.
Hundt said he expects his agency, the FTC and Justice to continue working together “on companion policies that are complementary.”
What those policies are will depend on whether competition rings true or hollow for consumers when they open their monthly bills.
