Updated: Sept. 25, 2012 (Initial publication: Sept. 9, 2010)
Sectorial Analysis
II-2.5 : the American Federal Communications Commission announces closer cooperation with the Department of Justice in reviewing mergers.
http://www.thejournalofregulation.com/spip.php?article474
ENGLISH
The Federal Communications Commission (FCC) announced on August 5, 2010, that it will cooperate more closely with the Department of Justice (DoJ) in merger reviews in the telecommunications sector. This measure is intended to foster reconciliation of potentially divergent goals for mergers set forth by both authorities.
GERMAN
Die Federal Communications Commission (FCC, die amerikanische Bundeskommunikationsbehörde), wird im Bereich Fusionenüberwachung enger mit dem Department of Justice (das amerikanische Justizministerium) arbeiten.
Die FCC hat am 5. August 2010 bekannt gemacht, dass sie enger mit dem Department of Justice (das amerikanische Justizministerium) im Bereich Fusionenüberwachung in der Telekombranche. So wird die Annäherung von beide Behörde, die oft unterschiedliche Zielen bei Fusionen unterstützen, gefördert.
SPANISH
La American Federal Communications Commission (FCC – La Comisión americana de comunicaciones federales) anuncia cooperación más cercana con el Department of Justice (DoJ – El Departamento americano de justicia) en la revisión de fusiones.
La Federal Communicatins Commission (FCC – La Comisión americana de comunicaciones federales) anunció el 5 de agosto 2010 que tomará pasos para aumentar su operatividad con el Department of Justice (DoJ – El Departamento americano de Justicia) en la revisión de fusiones en el sector de telecomunicaciones. Esta medida sirve para fomentar la reconciliación entre objetivos potencialmente divergentes puesto en marcha por estas dos autoridades.
Other translations to come
Context and Summary
Brief commentary
This case is an example of the differences between the goals of Competition Law and the goals of Regulatory Law.
The Department of Justice’s goal to have Verizon divest its licenses to a strong competitor is logical in the sense that only a strong competitor can provide the ambit of services and a guarantee for long-term stability required on the telecommunications market, especially given the rarity of mobile frequencies available in the radio spectrum.
However, this position does not take into account Regulation’s ex ante specificity, and the FCC’s capacity and mission to ensure the development of competition on a market with gross imbalances in operators’ power. The FCC’s expertise and knowledge of the telecommunications sector and market enable the agency to ensure that the divestiture of frequencies to an emerging or regional operator would be beneficial for the overall market and would not lead to negative effects for the consumer.
Furthermore, this is an example of discordance between the notions of symmetrical and asymmetrical regulation. Symmetrical regulation is the form of regulation performed by competition authorities (in this case, the DoJ behaves as a sort of competition authority), who regulate the relations between competitors who are seen as operating on a level playing field, and who are strong enough to compete with one another on the market, in order for this competition to produce a fair price.
On the other hand, asymmetrical regulation, performed by specialized regulatory authorities (in this case, the FCC), stems from the observation that there is no market a priori, and therefore a market must be constructed by favoring the weak entrant over its much stronger, established competitor, usually a former monopoly player.
Therefore, the DoJ takes into account only the rarity of the resource in question (radio frequencies), whereas the FCC takes into account only the degree of maturity of the market.
Indeed, in France, the Autorité de régulation des communications électroniques et des postes (ARCEP – French telecommunication and postal regulator) currently performs symmetrical regulation in the mobile telephony sector, believing that the market is now sufficiently established that competitors are capable of competing on a level playing field, and are strong enough on their own merits that they no longer require asymmetrical regulation. In this specific example, the ARCEP behaves as a specialized competition authority, rather than a true regulatory authority. For an example of an area where the ARCEP continues to practice asymmetrical regulation, see Les cahiers de l’Arcep, n°2, p. 3, on La revolution numérique (The digital revolution).
The August 5, 2010 announcement of closer cooperation between the FCC and the DoJ in such affairs is doubtlessly a positive step, for it will allow the DoJ, through enhanced dialogue with the FCC, to take into account the specificities of a market with a designated regulatory authority in its decision making process. Indeed, it would have been impossible to reconcile the contradictory positions between symmetrical and asymmetrical regulation, and therefore, the FCC, in aligning itself with the DoJ’s position and increasing cooperation, is taking a step towards becoming a specialized competition authority.
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