Back at FTC, Simons likely to play critical role in shaping industry
By Bill McConnell -- Broadcasting & Cable, 11/11/2001 7:00:00 PM
Few media attorneys are likely to be familiar with Joseph Simons, but many will get to know him well during the next couple years. Named chief of the Federal Trade Commission's Competition Bureau in June, Simons is likely to play a critical role in shaping the industry—especially if the courts force the FCC to cede most merger due diligence to the FTC and the Justice Department, as many predict.
Although Simons has had limited experience with media mergers, his mentors in the antitrust field have been influential in shaping the deregulation and consolidation wave that began in the 1990s. They predict that his legal and economic expertise will be an asset if a large wave of deals comes before the FTC.
"I'm so proud of Joe. He's a much better antitrust lawyer than he is a jump shooter," says Thomas Krattenmaker, one of Simons's law school professors and a former competitor in a Sunday-morning basketball league. "He was an exceptional student, and he's always taken on the most challenging assignments and exceeded expectations."
Simons credits Krattenmaker and three other top antitrust experts on the Georgetown faculty for whetting his interest in the field and giving him the opportunities to perfect his skills. His other teachers: Robert Pitofsky, who just stepped down as FTC chairman, Steven Salop and Warren Schwartz—all well-recognized in the study of mergers and corporate concentration.
"It's highly unusual to have that depth and breadth of professional talent in one place," Simons says.
Krattenmaker and Salop provided Simons his first exposure to media-related economics as they prepared what would become a leading model for antitrust reviews. Known as "raising rivals' costs," the model measures whether vertically integrated firms have the power to increase competitors' costs. Much of the theory germinated while Krattenmaker headed an FCC investigation into the TV networks in the late 1970s, work that eventually led the agency to erase rules barring networks from producing their own prime time shows.
Simons first made a name for himself in antitrust during his first stint at the FTC, which he joined in 1987 as assistant to the competition bureau director. Over the next two years, he rose to head of the merger evaluation office and then associate director for mergers, the agency's second-highest job on the merger-review staff. During that period, the agency dealt with some of the biggest deals of the '80s.
The understanding of antitrust theory gleaned from his mentors gave Simons crucial insight that he used to derive his own merger model. He and another FTC staffer developed a theory known as "critical-loss analysis," which later became a key test in FTC and Justice Department merger guidelines and has been endorsed by the federal appeals court in St. Louis.
Returning to private practice when his first FTC stint ended, he participated on both sides of some of the biggest mergers of the late '80s and early '90s, including a failed attempt to block Georgia-Pacific's $4 billion takeover of Great Northern Nekoosa Corp.
Most recently, as a partner in the Washington office of Clifford Chance Rogers & Wells, he was named trustee in charge of selling wireless licenses in Chicago, Cincinnati, Houston and San Diego whose divestiture the FCC ordered as a condition of the Bell Atlantic-GTE-Vodafone merger. The trusteeship made him, in name anyway, the 10th-largest holder of wireless licenses in the U.S. in terms of subscribers served.
Despite securing his first law firm partnership only four years ago, Simons jumped when FTC Chairman Timothy Muris, who had worked with him at Collier, Shannon, Rill & Scott in the early '90s, offered the opportunity to return to the FTC. The intellectual challenges posed by overseeing the biggest mergers, he says, is an education hard to pass up.
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