DOJ ANTITRUST NOMINEE SAYS MEDIA DIVERSITY IS FCC'S DUTY
The nominee for Justice Dept. Antitrust Div. chief said it was the FCC’s duty to monitor the media marketplace for diversity and said the DoJ evaluates media mergers on solely economic factors. Hewitt Pate, the acting Antitrust Div. dir. who was nominated for the top post, told the Senate Judiciary Committee Wed. that the DoJ has to “proceed under the standards of the Sherman Antitrust Act” and limit the scope of merger reviews to the economic affect it would have on the marketplace. “We make our case specifically on anticompetitive issues,” Pate said. He appeared likely to be confirmed.
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Media consolidation was a frequent topic during the hearing and Pate reiterated his position on the DoJ’s authority in response to several questions. Antitrust Subcommittee Chmn. DeWine (R-O.) said media consolidation was a concern for the Judiciary Committee but acknowledged it was an issue “larger” than the DoJ’s mandate. Judiciary Subcommittee ranking Democrat Leahy (Vt.) also emphasized his concerns about media consolidation. But while Pate said the diversity issue wasn’t in the DoJ’s mandate, the DoJ “may” help to preserve diversity of voices just through pursuing the economic antitrust cases. “When we stop anticompetitive transactions, we may preserve diversity of voices,” Pate said.
Pate countered Antitrust Subcommittee ranking Democrat Kohl’s (Wis.) assertion that the FCC’s ruling on June 2 would lead to more consolidation. Where Kohl cited a Merrill Lynch report that predicted a media consolidation “binge,” Pate referenced a Precursor Group report that said the proposed rule changes wouldn’t necessarily lead to more consolidation. “We're not in the business of predicting what’s going to happen,” Pate said.
Kohl raised concerns about the proposed purchase of DirecTV by News Corp., but Pate wouldn’t comment specifically on News Corp.’s proposal. He did say that generally, vertical integration, like the News Corp. proposal, usually provided fewer antitrust concerns than horizontal integration. Pate said he was pleased that the DoJ rejected the proposed DirecTV-EchoStar merger, a horizontal merger that he said offered more antitrust concerns. DeWine said the Antitrust Subcommittee would hold a hearing in June on the proposed merger, which he said would be “lively and positive.”
The DoJ also isn’t likely to address the growth of Clear Channel, Pate said. When asked by Kohl about the national radio environment, Pate again said it’s the FCC’s mandate to address those ownership issue and noted that the ownership limits are established by the Telecom Act. When the DoJ reviews local radio mergers, Pate said it does so from a local perspective and doesn’t take into account how many stations that chain may own nationally. “We look at what affects it would have on a particularly locality,” Pate said. “We don’t look at it nationally.”
Pate didn’t acknowledge any investigations of Bell companies, but did say the agency would investigate any allegations of anticompetitive activity. DeWine asked Pate if the DoJ has opened any investigations of Bell companies that have qualified for Sec. 271 relief. “Once we conclude that a market is open, the market will function,” Pate said. “There will be access for local competitive firms.”