Clyburn Says Pending Mergers Must Improve Overall Competition to Garner FCC Approval

“One of the things that I look at is the economic impact on small and large markets, regional and national markets,” Clyburn said. The FCC’s different standard for evaluating mergers differs from the FTC’s. “That’s a good thing,” she said. “We have a public interest obligation.” Clyburn said the FCC needs to look at the impact of any deal on the marketplace. “It’s important that when we say 'yes' to something that there’s … an improvement in the marketplace for individuals,” she said. “That there are more opportunities, not less, that there are more synergies, not less.”

Commissioners Jessica Rosenworcel, Ajit Pai and Mike O’Rielly were on the same panel, but declined to comment on the pending mergers.

Clyburn also accused the FCC of “regulatory malpractice” in taking 10 years to address exorbitant rates for calls from inmates in prisons. “I don’t know how else to put it,” she said. The FCC adopted an interim cap on interstate calling rates while Clyburn was the agency’s interim chairwoman (see 1308120049). Clyburn said she still gets emotional when she discusses the issue.

Clyburn said she's pushing for quick action on a cap on intrastate call prices as well. Most calls from prisons and jails -- some 80 percent -- are made within a state, she said. Ancillary charges for calls have increased in some areas since the FCC approved the cap in August 2013, she said. “We have got a problem,” she said. “It has not gotten better for the bulk of individuals. It is a stain. It is a blight.”

Pai agreed it shouldn't have taken “almost a decade” for the FCC to take up the issue of high prison calling rates. “It shouldn’t take 10 years for any petition to be decided by the FCC,” said O’Rielly. But O’Rielly said more competition is a better answer than more regulation. “It’s a broader issue of social justice,” Rosenworcel said.

Clyburn and Rosenworcel both called for changes before the TV incentive auction to the commission’s designated entity (DE) rules. The FCC sought comment on changes to the rules in October (see 1410140190).

Clyburn said it's time for the FCC to modify its attributable material-relationship rule, which limits the ability of a DE to lease to another carrier spectrum licenses it buys, rather than build out its own network, and its former defaulter rule, which requires bidders to make larger upfront payments for licenses if they ever defaulted on a license or were delinquent on a debt owed to a federal agency. The FCC needs to change rules when they have “outlived their usefulness,” she said.

Rosenworcel said the current rules stem from the Omnibus Budget Reconciliation Act of 1993. But “1993 was a really long time ago,” she said. “We have seen lots of changes we need to be mindful of.” O’Rielly said it's too early to know the extent to which DEs have participated in the AWS-3 auction since the auctions continues. “I fully support facilities-based competition,” he said. “What I worry about is that the rules can be used by some to obtain licenses for the pure purposes of flipping the licenses.” All four of the commissioners said the FCC should collect more data on minority participation in auctions.

The commissioners were asked about digital redlining. The cost of digital exclusion is high “and getting higher,” Rosenworcel said. “Making sure that everybody in this country has access to really high speed broadband is an essential part of ensuring that all of our people and all of our communities have a fair shot at prosperity in the 21st century.” The FCC needs data from the public demonstrating where the gaps are, she said.

Clyburn said there's some “uncertainty” on steps the FCC can take on digital redlining. “As I sit here I am not aware of any complaints that have officially come forward and if there are no complaints there is no data,” she said. “There is no ability for us to even consider acting.” But Clyburn also said any redlining is “unconscionable.”

O’Rielly said he would be happy to examine any claims of unbalanced broadband build out. But “there are limitations to what we can do” under the Communications Act, he said. Pai said the U.S. is unique in its commitment to universal service. “As you travel across this country you recognize what a difference that has made in so many lives,” he said.

The commissioners expressed concerns about recent studies showing a lack of women and minorities in key jobs in the high-tech sector. Pai said he found the data “revealing and disturbing.” Diversity is a matter of good business, he said. “Talent is not limited to those of a particular gender,” he said. “Determination is not limited to those of a particular race.”

O’Rielly found the data troubling but said there are limitations to what the FCC can do here as well. “I suspect we’re going to see future discussions of this on Capitol Hill” and before other federal agencies, he said.

MMTC was formerly known as the Minority Media and Telecommunications Council.