Sen. Fritz Hollings (D-S.C.) and public-interest groups are complaining loudly about the decision by Justice and the FTC that one head is better than two when it comes to media mergers (they agreed to grant authority over all such mergers to DoJ's Antitrust Division rather than divide them up ad hoc). But some Washington observers say the change doesn't change much.
"What they are doing now is not so different than what they were doing," says attorney Donald Russell. He ought to know. He was head of the Antitrust Division's Telecommunications Task Force in the Clinton administration.
Media Access Project's Andrew Schwartzman agrees, in part. DoJ is a "career staff run by career people," he says, "and they are not politically driven." But he argues that it's how things look on the outside that matters: "There's zero transparency in the process with DoJ. There's a lot more transparency with the independent agencies. Justice reports to the president, and that can create the appearance of political intervention."
Jeff Chester, executive director of the Center for Digital Democracy, takes it a step further, saying that giving the Antitrust Division complete jurisdiction will equate to a free pass for media mergers. Still, others argue that DoJ's career staffers are actually more insulated from political pressures than the four FTC commissioners and its chairman, who, like the FCC, are all political appointees.
Whether the move is a sea change or an administrative one, the fact that it was made without Hollings's sign-off has the Senate Commerce Committee chairman seeing red and promising to put the move under a microscope.
"By granting the DoJ exclusive jurisdiction over all major media outlets—television, radio, newspapers, as well as movie theaters, production studios and book publishers—the agreement, in effect, has created for the DoJ complete oversight and control of all major public information distribution systems and media content producers," Hollings wrote to Assistant Attorney General Charles James and FTC Chairman Timothy Muris last week.
Hollings is mad for at least three reasons. First, he is an old foe of deregulation and fears, as does Chester, that the move could be a carte blanche for media melds. Second, he is an old-school committee chairman who wants agencies under his purview to remember who's boss. Third, transferring oversight to Justice gives the Senate Judiciary Committee more authority over those mergers.
It's the kind of turf war seen more and more between the Commerce and Judiciary Committees in both the Senate and the House. That could make life tough for James and Muris, although both should have political cover from the administration.
If the move is more than procedural, the new man to know is James. He is no stranger to the antitrust division, having served as deputy assistant attorney general in the first Bush administration starting in 1989. James also started his career at the FTC, arriving fresh out of law school in 1979. He ended that stint in 1985 as assistant to the director of the FTC's Bureau of Competition and went on to the Washington law firm of Jones Day.
Although the buck now stops with James, it doesn't start there. Merging media entities have a raft of lawyers to deal with at DoJ. Goodman is another name to remember.
James reorganized the division last January, promoting Nancy Goodman to chief of the Telecommunications Media Enforcement Section, where she heads up some 25 attorneys. Goodman had been Computers and Finance Division chief and Telecommunications Task Force assistant chief.
Other antitrust-division departments—such as the Litigation 3 group under Civil Affairs—also are likely to have some authority over media mergers, Russell says.
The division's chief economist, Michael Katz, while not specifically assigned to media mergers, also brings a great deal of media expertise to the department. Katz was the FCC's chief economist under Reed Hundt and also has done work for the broadcast networks, including a study that justified eliminating the 35% ownership cap.
