Staff Changes at FCC to Come in Late Stages of Verizon/SpectrumCo Review
Pending personnel changes at the FCC will come at what is likely to be a critical time for FCC consideration of Verizon Wireless’s proposed buy of AWS licenses from SpectrumCo and Cox. General Counsel Austin Schlick is scheduled to leave in mid-June and Wireless Bureau Chief Rick Kaplan’s departure will follow soon after. Approval of the deals, though likely with substantial conditions, is expected this summer. Current and former FCC officials said it remains unclear whether the departures will slow a final decision, and if so, for how long.
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Sean Lev, who will replace Schlick has sat in on a number of recent meetings on the Verizon/cable deals, according to ex parte filings. Ruth Milkman who is replacing Kaplan has not. The FCC is coordinating its review with the Department Justice.
"It will slow things down a little bit, unless they've already made up their minds,” said a former FCC official. “Anyone who is going to sign off on this thing is going to have to dig into it a little bit themselves. … Any sort of staff upheaval at the FCC will cause some delay. How significant the delay is I don’t know.” But a second former official said, “Most of the work tends to be handled at the staff level, not at the bureau chief level and DOJ may be taking the laboring oar on many issues here."
"There’s no reason for Rick Kaplan’s departure to slow down the commission’s work,” said a government official. “The commission has a team consisting of attorneys, economists, engineers and other professionals who have been in place since the deal was announced and their work continues and their collective institutional memory remains in place for Ruth Milkman and the chairman’s office to draw upon.”
Delays may be inevitable, said Free State Foundation President Randolph May, a former FCC official. “The reality is that these departures are more likely than not to slow consideration of the transaction just a bit,” May said. “These are not low-level officials departing. But because the replacements are already on board, and knowledgeable, there shouldn’t be much of a slowdown, if there is any. Like a lot of what the commission does, what matters most is how the agency orders its priorities. Right now, with all the talk about the spectrum crunch, I can’t think of anything more important on the Commission’s plate than completing its review.” Communications lawyer Andrew Schwartzman said the departures should slow a decision, “but not too much. The arrival of two new commissioners also slows things down."
"Things were still at a fairly staff-intensive level when they announced they would leave,’ said Public Knowledge Legal Director Harold Feld. “Even if Ruth Milkman has not been terribly involved until now, I don’t think they will lose much time bringing her up to speed. It may slow things down enough that we start to get into summer vacation season/election year slow down, but I don’t think it will have that big an impact."
A Verizon spokesman said the company continues a series of discussions with federal regulators. “They've been constructive,” the spokesman said. “We understand the concerns the policymakers have and we're working to address them as they arise. We continue to believe that we can get clearance in the timeframe we've been discussing, which is mid-summer."
In a meeting last week at the FCC, Verizon Wireless brought in Michael Katz of the University of California-Berkeley, who questioned arguments that the FCC should turn down what is essentially a secondary market transaction. Opponents “in essence seek a ‘beauty contest’ standard that compares the transaction before the Commission with other potential transactions that might have occurred,” Katz said, according to an ex parte filing. “This standard is not only inconsistent with competition policy and secondary market principles, which rely on market forces rather than the government to allocate spectrum, but is also flatly contrary to the Communications Act.”