The most stunningly underreported news item from last week was the proposal to carefully delineate antitrust review duties amongst the Federal Trade Commission and the Department of Justice. The plan was to give the Department of Justice the responsibility over judging which mergers in the media, entertainment, publishing, Internet and computer software industries would be allowed. As it stands right now, the Federal Trade Commission and Department of Justice basically haggle about who oversees what cases on a case-by-case basis. Sometimes, as in the case of the big America Online/Time Warner merger of 1999, the FTC gets the nod. Other times, the DOJ might handle a high profile merger like the AT&T/MediaOne merger in 2000. The Bush AdministrationÕs new plan to give the DOJ and the FTC jurisdiction over certain industries was meant to streamline the process for businesses and ultimately benefit consumers.
When this plan was announced early Thursday morning to the media, reporters queued up and sat down for the news conference to be conducted by FTC Chairman Timothy Muris and Charles James, the DOJÕs attorney general for antitrust. IÕm sure reporters were taken aback when Justice Department spokeswoman Gina Talamona read a short statement that did little more than abruptly cancel the news conference. By Friday, there was no mention of the merger oversight responsibility division anywhere in the media. Clearly this was a big deal on Thursday, why didnÕt the story catch on?
There was a flurry of media activity on Thursday afternoon, when Democrats and leftist watchdog groups immediately went on the attack. Claiming that giving the DOJ control over mergers in the computer software and cable communications industries would have been allowing the evil political appointees in the Justice Department to control consumer choice, Chairman of the Senate Commerce Committee, Democrat Fritz Hollings of South Carolina, cautioned that the plan would take control from an experienced trade agency and give it to the political appointees at the DOJ who just canÕt understand the finer points of business mergers. I suppose Senator Hollings must not have heard that satellite TV company EchoStar's bid to merge with DirecTV has been assigned for review by the DOJ.
Democrat Mozelle Thompson, an FTC commissioner appointed by the Clinton Administration in 1997, accused FTC Chairman Timothy Muris of Òprivate horse-tradingÓ with the DOJ. Thompson complained that he and the other commissioners were not allowed to vote on the deal which would take long-held and precious control from the FTC by splitting up the work between the two agencies. Essentially, Thompson was mad at his boss for lessening his workload and not telling him first. If your boss came to you tomorrow and said: ÒYou are going to get the same salary but half the work from now on because of a deal I made a few months ago,Ó who in their right mind would protest?
The left-wing activists at the Center for Digital Democracy moaned that the new DOJ/FTC merger oversight responsibilities would keep the public in the dark and an example of Òstar chamberÓ politics; where decisions are made by rich white men in dark smoke-filled rooms. Strangely, the CDD reserves their venom for the DOJ and not for the FTC (who would oversee the incredibly lucrative, increasingly digitized and merger-prone health care, biotechnology and computer hardware industries). Apparently the five member FTC would not dare to be corrupted the way the DOJ is because two out of the five FTC commissioners are Democrats. To the CDD, itÕs a fact that the DOJ is controlled by the white Republican evangelical Christian, John Ashcroft, who is owned by the big business special interests. Why, if the DOJ is in charge of media mergers, Ashcroft would allow Microsoft to purchase General Electric! The CDD is concerned about how any independent thought would survive if all the ÒMust See TVÓ shows on Thursdays had characters that exclusively used Windows XP and AT&T Broadband rather than an iMac hooked up to a non-profit shared bandwidth cooperative. Oh, the shock and horror!
By the end of prime time TV viewing on Thursday, the CDD and Democrats were mum on the whole thing. What happened? Why the silence? Did the overwhelming evidence finally point out that the Department of Justice actually was very fair and thorough on merger reviews? Did all the antitrust lawyers who have complained for years that the current merger review process is inefficient because the FTC/DOJ have such different standards explain to the media how much better this new method would be for businesses and consumers? Was it common sense that won the day?
I doubt it. WouldnÕt consumers have benefited from Justice Department scrutiny of big media mergers like AOL/Time Warner? Most on the far left agree that AOL/Time WarnerÕs regulatory shackles placed on them by the FTC were not enough to keep them from continuing to acquire smaller companies and shut out their competitors. Reports say the media conglomerate will buy Red Hat Linux soon, a move that could potentially put AOL into the same market as Microsoft. Microsoft, in acquiring stakes in many cable companies, angered many so-called consumer advocates like the CDD even though Microsoft has not purchased any cable TV networks the way AOL purchased cable TV giant Time Warner. DOJ scrutiny would be preferable in such mergers and those who oppose the new division of duties know it.
ThereÕs no clear cut reason I can find for the silence, but I see it as golden. If the elite media spend all their time on desperately trying to connect the dots between Enron and the Bush Administration, they might not even realize that the DOJ/FTC have divvied up merger responsibilities and might actually make the merger review process run more efficiently.
IÕm being sarcastic because thatÕs as ridiculous as the leftÕs anti-capitalist opposition to the DOJ/FTC merger duties reassignment. Wayne Crews, the director of technology studies at the Cato Institute, speaking of this reshuffling of governmental duties, said it best: ÒYou don't want government to be more efficient in doing something it shouldn't be doing in the first place.Ó
Email your comments to scott@worldtechtribune.com
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