Judge Not Ready to Act Yet on Bell Mergers
The judge reviewing 2 Bell mergers under the Tunney Act again held up the possibility of an evidentiary hearing into the way DoJ handled the Verizon-MCI and SBC-AT&T mergers. U.S. Dist. Judge Emmet Sullivan made clear at a hearing Thurs. that he’s still not ready to close the book on the review, which started in May. As he has previously, he frequently asked rhetorical questions about whether he should be doing more to meet the requirements of the Tunney Act, particularly because it was recently strengthened.
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Sullivan bridled at a comment by Verizon attorney John Thorne about the value of the Verizon-MCI merger since it closed last year. Sullivan said it’s “pretty presumptuous” to refer to a merger being closed before his court finishes reviewing it. “Maybe Congress should go back and make sure a merger does not close until independent review [is over],” Sullivan said. Thorne said that might delay benefits to consumers. “That’s for Congress to decide,” Sullivan responded.
Sullivan later asked DoJ attorney Claude Scott if he agreed that the merger is a “fait accompli.” Scott said no but repeated DoJ’s frequent reminder that the Tunney Act review focuses on the DoJ consent decree that settled concerns about merger harm, rather than the merger itself. Asked what would happen if the court didn’t approve the consent decree, Scott said DoJ would have to go back and determine what additional action was needed to resolve the judge’s concern.
The consent decrees in both mergers called for divesting private lines in buildings where the merger reduced competitors from 2 to one. Sullivan raised questions about whether the 10-year expiration date on those divestitures was necessary. Why couldn’t DoJ make the divestitures permanent? he asked. It seemed better for the industry to put a limit on it, Scott said. But what’s best for consumers? Sullivan asked.
Gary Reback, attorney for competitive industry group ACTel, recommended rejecting DoJ’s consent decrees in the 2 mergers, prompting Sullivan to ask why Reback didn’t recommend giving DoJ an opportunity to provide more evidence. “You've asked” for more evidence but not been satisfied, Reback said: “There’s no place to go. We're finished.” Sullivan later asked the Bell attorneys if they wanted to respond in writing to assertions by CLEC attorneys.
AT&T attorney Wilma Lewis assured Sullivan he has fulfilled his requirements under the Tunney Act by taking “an independent and active role” and hasn’t been a “rubber stamp,” a concern expressed by Sullivan in past hearings. The consent decrees remedied alleged antitrust concerns “a hundred percent,” she said. “The impact on competitors in the relevant market is addressed,” she said. Sullivan asked her: “At what point does a court consider evidentiary hearings?” Lewis responded: “Clearly not here.” Lewis added: “What is the purpose of evidentiary hearings if the harm was addressed 100% by the remedy? The issue before this court is straightforward and clear. The remedy addresses the harm.”