Senators Press Delrahim on Telecom, Media Antitrust Issues in Written Questioning

“At what point is there too much consolidation?” Senate Judiciary Committee ranking member Dianne Feinstein, D-Calif., asked, citing AT&T's planned buy of Time Warner and suggestions it “could be a precursor for significant consolidation in the telecom, cable, broadband, and media industries -- which are already significantly consolidated.” She noted rumors of Verizon acquiring a cable operator.

Delrahim told her it’s “inappropriate” to discuss pending deals under review. Past consolidation is relevant to current scrutiny, he said, noting most antitrust scholars see vertical mergers as less concerning than horizontal mergers. He later said it’s important for political considerations not to influence his decision-making and for White House contracts to comply with DOJ policies.

“More and more, I am hearing concerns about vertical mergers,” said Sen. Amy Klobuchar, D-Minn., ranking member of the Antitrust Subcommittee. “Independent video content providers and independent video distributors worry that they may be discriminated against if video distributors acquire their own content providers.” Delrahim repeated earlier comments.

Sen. Patrick Leahy, D-Vt., also invoked AT&T/Time Warner, asking if Delrahim has discussed that or any other deals with the Trump administration or its transition team. “I have discussed my potential recusals with Justice Department and administration ethics officials,” said Delrahim, who formerly represented AT&T. He said he made no commitments on pending DOJ matters.

Sen. Al Franken, D-Minn., wasn't satisfied with the response AT&T sent earlier this year about the TW deal and expressed concerns about conditions. Delrahim said generally, “I tend to believe structural relief has many advantages over behavioral relief when antitrust enforcers are considering whether and how to remedy a competitively problematic transaction.” Franken pressed Delrahim on a past comment about media deals getting more attention due to their significance for democracy. “I agree with you that media consolidation is an important public policy issue,” Delrahim said, saying more competitors may not always yield a diversity of media viewpoints but often can: “As more programmers and media outlets compete for advertising and viewers, the likely result will be more diversity of programming choices. Additionally, as media technology improves, the likely result will be greater opportunity for diversity of programming.” He told Franken his past representation of Comcast didn’t include net neutrality lobbying or lobbying on its NBCUniversal acquisition.

Sen. Dick Durbin, D-Ill., asked if it was appropriate for President-elect Donald Trump, who slammed AT&T/TW on the campaign trail, to meet with the AT&T CEO at Trump Tower during the transition. Delrahim told him Trump or other officials “may have a variety of reasons to discuss issues with industry CEOs.”

Feinstein pressed on DOJ blocking AT&T/T-Mobile in 2011 and asked the nominee whether that was the right call. He said he was “not privy to the confidential information and analytical data” at DOJ then. “I have not recently studied the state of the competition in the wireless market and therefore do not have any particular impression” and would “look forward to studying it,” Delrahim told her when asked about the possibility of a Sprint/T-Mobile and wireless competition. He told her he has “not studied” the Comcast/NBCU deal “nor its effects,” expressing interest in learning more. “It is important for antitrust law enforcers to be confident that the remedies they impose will be effective with respect to the competitive problem identified when they take action against a merger,” he said. “It is likewise important for parties that commit to conditions as part of the merger review to live up to those conditions and for the Department to vigorously ensure compliance.”

Klobuchar noted internet platforms may use market power “to extract a greater share of advertising revenue at the expense of newspapers and other media,” asking about possible concerns with monopsony. Delrahim told her antitrust laws should be concerned with monopsony issues.

“Many online platforms benefit from network effects that make them dominant means for business to connect with consumers, giving them disproportionate power over the evolution of competition and the services available to consumers,” Feinstein said. Antitrust laws involve “unilateral and coordinated conduct” across industries, including such online platforms, Delrahim told her, citing the flexibility of laws over time: The division would "investigate and vigorously enforce the antitrust laws with respect to online platforms as I would to any industry, based on the economic and analytical tools appropriate to the circumstances and to ensure robust competition and innovation.”