Repeal Common Carrier Exemption on FTC, Commissioners Say
The FTC has FCC envy, if commissioners’ comments to the Senate Commerce Committee Tues. are any indication. There’s no practical reason to exclude the FTC from telcos’ broadband pricing and marketing and related issues, FTC Comr. Thomas Rosch said, adding that the agency’s track record on telecom issues such as mergers “speaks for itself.” All 5 FTC members answered affirmatively to Sen. Dorgan’s (D-N.D.) question on whether the common carrier exemption -- which limits telecom-oriented trade areas to FCC jurisdiction -- should be repealed, but Dorgan criticized their XM-Sirius merger role.
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Ranking Member Stevens (R-Alaska) said a “collision course” between FCC and FTC seems inevitable. He said the committee plans to give the FTC a “clean bill of health” -- its first reauthorization since 1998. There are “several areas of overlap where we work closely” with the FCC, such as the Do Not Call list, now at 142 million registered numbers, Chmn. Deborah Majoras said. “We've divided the work quite effectively” on pretexting, with the FCC handling telco protections for customer proprietary network information (CPNI) and FTC cracking down on Internet sellers of CPNI, she added. Majoras noted the FTC filed 5 complaints against Internet sellers before the HP pretexting scandal captivated Congress.
But converging services mean “we find ourselves bumping up against that [common carrier] exemption more and more,” Majoras said: The agency is “already seeing places in which companies raise [the exemption] and stymie our enforcement efforts.” It’s becoming the norm to bundle broadband with voice service, but when the FTC pursues ad and pricing structure, companies have said “Nu-uh, you can’t do that,” she added. “Highly dynamic industries… are blurring together” but the “legal infrastructure” for consumer protection enforcement is outdated, Comr. William Kovacic said.
Agencies always want more resources, said Acting Chmn. Pryor (D-Ark.). Publicly or privately, “tell us what you would do with those resources” and exactly what statutory authority the FTC would like, so if money shows up in the budget, Congress can oblige, he said.
The FTC isn’t itching to invade DoJ territory, however, commissioners said. Dorgan asked about the FTC oversight role in the XM-Sirius merger. That’s a matter for DoJ, Rosch said: “As to us, I don’t know what the answer would be.” Majoras said the FTC has a memorandum of understanding with DoJ on the matter, but DoJ has more radio competition experience and the FTC would leave most of the work to DoJ.
Dorgan booed the buck-passing. “This committee might want to have some discussions with Justice and others” on combined radio oversight, he said. Federal attorneys’ photos should run on milk cartons, considering how much they've “vanished” from antitrust work, Dorgan said: The attitude is “you want to merge, merge. No one seems to care very much.” Comr. Jon Leibowitz hedged on his agency’s culpability: “Most of the time I've heard those criticisms, it hasn’t been about the FTC.” Dorgan didn’t relent. Commissioners keep saying “let’s let the market sort this out. There are plenty of perversions in the marketplace,” with regulators as “referees,” Dorgan said: “I want a Federal Trade Commission to be worthy of its appointment and its work.”
The FTC sought $240 million and 1,084 full-time employees for FY2008, up $17 million from FY2007. That would fund mandatory salary and contract expenses ($8.8 million) and 10 new full-time employees for the Privacy & Identity Protection Program ($1.4 million). It also would fund consumer protection outreach and enforcement ($4.5 million); “Media literacy” ($2 million); electronic litigation, e-gov and IT initiatives ($1.6 million); Do Not Call renewals and outreach ($1.3 million); anti-spyware enforcement and promotion of “industry self-regulation” in selling entertainment and food to children ($100,000 each); and building and “human capital” needs ($900,000).