The US Federal Communications Commission (FCC) this week tweaked its review standard for mergers in a move that could have implications for big deals down the line.
In approving two large deals Monday, including a $34 billion tie-up between wireline broadband providers CenturyLink and Level 3 Communications, Chairman Ajit Pai said the commission clarified rules that have become muddy in recent years. The commission, he noted, is tasked with identifying public harms that could stem from deals and implementing “narrowly-tailored” remedies rather than “grab-bag” concessions.
“This clarity will help the public to see that transactional review is an occasion to carefully consider how the transaction itself impacts the public interest, not an opportunity to extract a range of concessions, tangentially-related at best, from parties with applications in front of the Commission,” he said in a statement.
The changes could impact future merger deals that come before the commission, including a much-discussed potential merger between US operators Sprint and T-Mobile. Previous reports have indicated Sprint and T-Mobile would attempt to secure approval for a potential merger without concessions, including the sale of their spectrum assets. That particular deal’s fate seems to be in question at present, but other agreements, such as a spectrum transaction between a US operator and Dish Networks, could also benefit.
Pai’s statement was in keeping with his dissent from the approval of the Charter-Time Warner Cable merger deal last year, but the minority Democrats on the commission argued Pai’s new approach lacks balance.
Commissioner Mignon Clyburn claimed Pai’s approach “radically alters” the historical review process, and leans on “suspect market analysis” that “ignores an entire portion of the market” that could be impacted by the deal.
Commissioner Jessica Rosenworcel, who said she supported the CenturyLink transaction, expressed concern that “our capricious disregard for precedent is simply part of a larger effort to speed the way for the next billion dollar transaction before us.”