FCC Commissioner Michael Copps Talks Mergers With Consumerist

Of the commissioners on the FCC, Michael Copps is easily the most outspoken in his opinion on media consolidation. In January, he was the only commissioner to vote against the sale of NBC to Comcast, saying that the deal “grievously fails the public interest.” More recently, he’s expressed his skepticism about how smoothly the AT&T purchase of T-Mobile USA will go. And he’s also a cool enough guy to sit down for a chat with Consumerist.

I recently had the opportunity to speak with Commissioner Copps, whose decade with the FCC will end when the next Congress adjourns, about these big-dollar deals and what the agency’s role should be in reviewing them.

CONSUMERIST: What is your vision of the FCC’s role in the regulatory review of mergers like Comcast/NBC and AT&T/T-Mobile?

COMMISSIONER COPPS: To me our role is very, very clear. It’s to make sure that any proposed transaction serves the public interest. And the precedent is also quite clear, that the FCC is well within its purview if it, in looking at the public interest — which can include such things as impact on the consumers, impact on competition, impact on diversity, and so forth — that we can look at that merger in those contexts. And if it becomes necessary to preclude harms from the merger to make it work in the public interest, we can attach conditions thereto…

You take a merger like Comcast, NBC/U or AT&T and T-Mobile and these are paradigm-changing transactions. They have an immediate, immense impact on consumers, an immense impact on the state of competition in the industry… And when you’re talking about something with that kind of impact, our merger analysis should, I think, cover pretty wide terrain.

CONSUMERIST: Specific to the AT&T/T-Mobile deal, which facets of that merger do you think merit the most FCC scrutiny?

COPPS: I have said before that this kind of merger would be such a steep, steep, steep climb for me given where I have come from with my skepticism over the years of industry consolidation — telecom consolidation and media consolidation both.

The papers are not in yet so you can’t make too many comments about the proposal itself other than that it seems at this level we’re flying at now, 50,000 feet, that it is paradigm altering and it will have an impact on consumers. It will have an impact upon competitiveness and therefore innovation and research and development.

And it’s certainly going to have an impact on jobs. When the principals of the merger were in my office, I asked specifically how many jobs was this going to impact and they did not have an answer. We need to have an answer on that. I expressed some concern in some of my comments since then about a lot of money involved in this transaction. How much is that going to end up over in Europe being invested in telecommunications over there? How much of it is going to stay right here? So let’s put on our hats of being a consumer protection agency here first and foremost and see how jobs and consumers and Bills and control of new technologies and innovation, how all of that is impacted by this merger, and let’s get a good understanding of it in the months ahead.

CONSUMERIST: To some outsiders watching the regulatory review process, it looks like the decision of whether or not to block a merger ultimately ends up in the hands of the Justice Department and the FCC is tasked with just slapping conditions on the deal if the DOJ approves it. How accurate would you describe that view?

COPPS: I don’t think that’s 100% accurate. We can and have turned mergers down. And I think some of the industry players know that. We don’t have any long list of historical precedence to document what I just said, basically because we’ve been in the business of approving so many mergers, sometimes with conditions. But that does not mean that we are at all bound to approve mergers or that we cannot turn a thumbs down on a merger.

CONSUMERIST: With the NBC/Comcast deal and the Verizon/Alltel merger, some criticisms been leveled at the FCC that the conditions put on those deals by the FCC are more in the interest of the other, competing companies involved than they are in the interest of the consumer.

COPPS: That’s a fairly wide generalization. I think there’s no question though that we spend a lot of time at this Commission, and have for most of the last 20, the past 30 years anyhow, kind of mediating between big interests when it comes to things like consolidation or retransmission consent or any number of other issues, things that we need to be considering from their impact on consumers. And I think this Commission is doing a better job of trying to look after consumers, but there’s always a long way to go.

I made a reference the other day that it wouldn’t be entirely unjust to call us the Federal Merger Commission or the Federal Consolidation Commission because we have, in recent years, approved so many mergers. And I’ve remarked many times that I’ve spent so much of my nearly 10 years here just listening to people come in with merger deals and transactions. And they say, “Well, you know, a few months ago you let our competitor get bigger so now we have to get bigger too and grow bigger.” And then when they’re out the door and that merger’s approved, somebody else comes by with the same kind of message for us. And we can’t entirely control that because it’s the private sector that brings these things to you, so you have to pay attention to them. But the fact that we haven’t turned more of them down or attached really all those meaningful conditions to them just kind of encourages industry to keep coming our way and knocking on the door with the hope that the door will be open.

CONSUMERIST: Looking back at the Comcast/NBC deal, is there anything those companies could have done that, in your mind, would have made that venture acceptable?

COPPS: I would have been more encouraged had Comcast made some real commitment to news. And I talked to them about this, I talked to folks here in the Chairman’s office sitting on the team that was reviewing it.

I’m very concerned about what’s happened to news and information in our society. I think this is one of the most important aspects of the broadband revolution for us to consider. If our democracy’s town square is going to be paved with broadband bricks, we have to make sure everybody has access to it, that they can get there, and that it’s informed by the news and information that people need in order to make intelligent decisions for the future of their country.

I don’t know of a more serious challenge that the country faces than making sure that we have, that voters have, citizens have the fact facts they need to determine their own country’s future. And journalism has been pillaged over the last, I don’t know, five, 10 years or 15 years or maybe even longer than that, by these huge consolidation and merger deals.

And the first thing that a combined entity often does is look for all of those efficiencies and economies, and they look right at that news room which maybe isn’t making as much money as they would like and journalists get fired and newsrooms get downsized or outright shuttered. That’s not good for democracy at all.

So had Comcast said, “Well, look, we control a lot of stations and outlets and we’ve got a lot of resources, and here’s a serious commitment that we’re going to hire back a lot of those journalists that were laid off. And we’re going to put X-dollars of resources into this and building up bureaus around the world and really giving people information that they know is substantive information,” that might have coaxed me to look a little more approving towards the merger.

For more from Commissioner Copps on media consolidation, download (in Word format) and read this speech he recently gave at The National Conference for Media Reform.