Sen. Fritz Hollings (D-S.C.) last week threatened to cut jobs and funding at the Federal Trade Commission if the agency hands off media-merger reviews to Justice as planned.
Those threats didn't seem to sway FTC Chairman Timothy Muris, who said he had no intention of changing the plan, part of an agreement between the FTC and Justice's Antitrust Division (Broadcasting & Cable, March 18). That plan pre-assigns industries to either agency in an attempt to curtail in-fighting once mergers occur. Media and entertainment mergers will fall solely to DoJ for review, a point that worries public-interest advocates, who say that the FTC— because it has a five-member panel appointed from both parties—is more open and less politically motivated than DoJ.
"The reality is we have two antitrust agencies working on antitrust law and only one agency can work on a merger," Muris told Hollings. "This process worked well until the 1990s. Before, we had only 10 disputes a year. Now, we have more than 80 disputes a year."
Those disputes hold up the process, Muris said, citing one example in which it took the two agencies a year just to decide which one would review the merger.
Those arguments did not sway Hollings, however, who first became angry last January when the two agencies announced their plan without first informing him.
"Where do you think you get the authority to change the authority?" Hollings asked Muris, who responded that the law does not require congressional intervention to change the merger-clearance process. Hollings strongly disagrees.
"What we'll have to do, by god, is just come here," Hollings said, "and just cut that budget so we get their attention."
Hollings has influence over the FTC and DoJ because he chairs the Senate Appropriations Subcommittee, which sets budget for both agencies, and the Senate Commerce Committee, which has authority over the FTC. Some say this is another reason Hollings hates the plan: It gives the Senate Judiciary Committee that much more influence over media and entertainment companies, an area that typically falls to the Commerce Committee.
Specifically, Hollings doesn't like that the FTC and DoJ consulted Joe Sims, an attorney with the Washington law firm of Jones, Day, Reavis and Polk, the same firm from which Assistant Attorney General Charles James came. Sims represented AOL Time Warner before the FTC when that deal was closing.
"The proper thing to do," said Hollings, "is not to go to a losing attorney and his former law partner and rewrite the memorandum of understanding."
But Muris took umbrage: "If Joe Sims was really interested in his pocketbook, he would have recommended matters be sent to the FTC, not DoJ, because his former partner [James] is recused. My own firm has lost business before the FTC because of my recusal."
Finally, Hollings also appears to be angry over changes the Bush administration is making without consulting the Democratically controlled Senate.
"This administration is running amok," Hollings said.
Hollings has been taking regulators to the woodshed with some regularity of late. He was similarly upset with Republican FCC Chairman Michael Powell, who testified before Hollings' appropriations subcommittee earlier this month. At that hearing, Hollings told Powell that he would perhaps be better suited to be executive vice president of the U.S. Chamber of Commerce because of his deregulatory approach to telecommunications policy.
"Perhaps we ought to assign you to the CIA," Hollings told Muris last week, "because you kept what you just described top secret, and I'm also chairman of the authorizing committee and I never heard about it."