Reexamining the Legacy of Dual Regulation: Reforming Dual Merger Review by the DOJ and the FCC

Abstract

Most debates over the structure of merger review in the telecommunications industry focus on the criticism that the role of the Federal Communications Commission (FCC) is entirely redundant in light of the review conducted by the antitrust agencies. The FCC's lack of a consistently applied standard only reinforces such criticisms. There are, however, cases where the FCC's review of a merger - and imposition of conditions that complement the existing regulatory regime - enable the antitrust agencies to clear mergers that would otherwise pose potential objections.

The central challenge for competition policy merger review is to structure the analysis of merger remedies so that the antitrust agencies play an effective and central role, with regulatory agencies complementing - as opposed to overlapping or contradicting - their judgments. At present, the U.S. system sometimes veers towards a worst case scenario where federal antitrust authorities - the FTC and DOJ - impose regulatory remedies that overlap with regulatory policy and regulatory agencies perform duplicative merger reviews and impose remedies unrelated to the mergers themselves. Moreover, antitrust merger remedies themselves are often not developed through a transparent, consistent, or predictable process. In short, there is compelling need for institutional reform of antitrust merger remedies in general and in particular with respect to how the FCC oversees mergers between telecommunications companies.

This article proposes a series of reforms to address the fact that the antitrust agencies and the FCC operate with a high degree of informality, periodic inconsistency, and a questionable allocation of authority between them. In particular, it proposes a set of reforms to cabin the authority of the FCC, limit the antitrust agencies' imposition of regulatory relief pursuant to merger reviews in the telecommunications industry, and to ensure a more transparent and defensible strategy for merger remedies by the antitrust agencies.

Keywords: mergers, antitrust, administrative law, telecommunications