Full speed ahead: FCC considers faster timeline for merger review

Responding to a wave of telecommunications deals and congressional pressure, the FCC wants to speed the time it takes to review mergers to no more than 180 days.

FCC staff at a March 1 public forum presented a timeline for reviewing merger-related license transfers while preserving the public's only chance for input to regulators.

The new timeline will be implemented quickly and will apply to mergers announced within the past few months, said Jim Bird, FCC senior counsel.

Companies involved in recent and pending mergers applauded the move. "Six months would be good. We encourage [the FCC] to adopt deadlines," said Alan Ciamporcero, vice president of regulatory affairs at GTE, whose $53 billion merger with Bell Atlantic was announced in July 1998.

The FCC, along with the Department of Justice and the Federal Trade Commission, examines proposed mergers for antitrust violations. Federal law also requires the FCC to ensure that the deals are in "the public interest," a standard the agency has interpreted to mean the promotion of competition.

Although many mergers fly through regulatory review, large, complex deals take longer because they involve novel antitrust questions, different FCC bureaus and many licenses, FCC staff said. For example, the SBC Communications/Ameritech review lasted about 15 months.

"We aim to go much faster," said Christopher Wright, FCC general counsel. Complicated mergers could take longer than 180 days, especially if merger partners submit major changes to their initial applications, he said.

Critics have said the FCC takes too long to review mergers, and some question whether it should review them at all. Legislation sponsored by Senate Commerce Committee chairman John McCain, R-Ariz., would remove the FCC's merger review authority. Another bill, by Sen. Mike DeWine, R-Ohio, and Sen. Herbert H. Kohl, D-Wis., leaves the FCC's power intact but would impose a time limit of 180 days for mergers worth $15 million or more. Mergers worth less would be limited to 90 days for review.

The DOJ has a maximum of 50 days to consider merger applications under the Hart-Scott-Rodino Act.

The FCC last week acknowledged an overlap with the DOJ and FTC but said it would work to avoid duplication in the review process. Staff provided no details.

Part of the problem is work overload. The FCC has processed nearly 143,000 license applications since 1996, about half of them for wireless licenses.

Although merger reviews are subject to delays all along the path, most holdups occur at the beginning of the process, when it can be difficult to get complete information, Bird said. "Sometimes [companies] strategically delay giving you information."

For example, MCI WorldCom and Sprint, which proposed a $115 billion merger, didn't address the critical issue of their overlapping Internet backbone networks until the FCC asked.

But it can be unclear exactly what information the FCC wants, Ciamporcero said. "There's a certain amount of uncertainty in the whole process. Their role isn't as clear as the [DOJ's]."

Mike Senkowski, a Washington attorney who has worked on mergers before the FCC, agreed. "With public interest being so broad, how does one predict what will be relevant under that standard?"

Irrelevant objections also cause delays during merger reviews. "Frequently, you find petitions [to deny a merger] filed by parties trying to get leverage in litigation or other disputes," Senkowski said. "There ought to be some process to deal with frivolous objections."

To make merger information more available, the FCC has posted the draft timeline and related documents on its Web site.