Hundt, Kennard Suffer From McCain Amnesia

One, my item didn't even address Sen. McCain’s interest in merger review legislation. I would note that to deal with FCC merger review foot-dragging when William Kennard led the agency, Sens. Mike DeWine (R-Oh.) and Herb Kohl (D-Wisc.), introduced a bipartisan bill (S-467) that required the FCC to act on phone company mergers within 180 days.

Two, Congress does not approve media and communications mergers. That job is assigned to the Federal Communications Commission and the Justice Department or the Federal Trade Commission. Capitol Hill lawmakers have been known to make extravagant claims, but I am unfamiliar with anyone in Congress who has taken credit for taking down an announced telecom sector deal within the last decade.

Three, the FCC approved the AT&T/MediaOne merger in 2000 under Kennard with public support from former FCC chairman Reed Hundt, as reported by Business Week. Sen. McCain spoke against the same deal, as quoted by Reuters. I don’t believe those fundamental points were challenged. I do find it odd that someone who cheered news of the AT&T/MediaOne deal would fault a committee chairman sour on the deal for delaying a hearing by 144 days.

Four, the Hundt-Kennard response made it seem as if McCain tried to kill the Satellite Home Viewer Improvement Act of 1999 (a bill he introduced) in some insensate act of legislative infanticide.
Actually, the SHVIA was folded into a massive, end-of-the-year $385 billion spending plan that ran 1,500 pages, stood a foot high, and heaved with $14 billion in pork barrel spending.

“This year, we are casting one vote, but it will count as a vote on each of 10 separate bills,” McCain said in a statement in late 1999.

McCain was describing an expedient practice on Capitol Hill that gave Hundt and Kennard the technical ability to say McCain “opposed final passage of the [SHVIA] bill.” It being campaign season, I’m surprised they forgot to say that McCain was for the SHVIA before he was against it.

By way of background, McCain complained that his original SHVIA bill—which would allow satellite TV carriers to offer local TV signals—had been hijacked by TV station owners to maximize economic leverage over satellite providers DirecTV and Dish Network. But McCain did not say that SHVIA was damaged goods in all respects.

“Despite the fact that I have worked for over a year and a half to bring pro-competitive relief to satellite TV and cable TV subscribers, I find myself having to speak out against some of the other satellite TV provisions that also appear in this bill,” McCain said.

I’m almost positive that Hundt and Kennard had an opportunity to review McCain’s Senate floor statement before writing their response, because both their letter here and McCain’s statement in the Congressional Record incorrectly stated the name of the law: It’s the Satellite Home Viewer (singular) Improvement Act, not the Satellite Home Viewers (plural) Improvement Act.

That could be just a coincidence—or a sign that two busy contributors to the Obama Victory Fund decided to outsource their research.

Ted Hearn's recent article ("Hundt, Kennard Suffer from McCain Amnesia")
accuses us of offering a selective reading of history to characterize
the record of Senator John McCain. Hearn challenges two statements we
have made about McCain's record as Chairman of the Senate Commerce
Committee. First, that McCain supported every media and telecom merger
that crossed his path in the Senate. And second, that McCain failed to
shepherd any major media or telecom legislation through the Congress
while he was Chairman. In both cases, the facts demonstrate that our
memories serve us well.


On the merger question, Hearn relies on a McCain quote about the
AT&T-MediaOne merger. McCain did not stand in the way of the major
mergers that he oversaw in his time as Commerce Committee Chairman. He
presided over some of the largest mergers in telecom history, including
the conglomeration of the Baby Bells into a virtual reconstitution of
the old Ma Bell. It is true that he sometimes asserted that the
Telecommunications Act of 1996 (a bipartisan bill that he aggressively
opposed) was responsible for mergers, although nothing in that law
affected the review standards of either the Department of Justice or the
FTC. But McCain's actions with respect to the AT&T/MediaOne merger
deserve special scrutiny.


The AT&T/MediaOne merger was announced on April 26, 1999. Shortly
thereafter, McCain reportedly announced that he would conduct an
oversight hearing on mergers in general to take place on June 17. On
May 26, McCain introduced a bill (S 1125) to strip the Commission of
authority to conduct merger reviews at all, claiming that the DoJ's
antitrust analysis was sufficient and the FCC didn't need to undergo a
public interest review. In this way, he sought to relax review of
mergers, not even to maintain the extant level of two-step scrutiny.


Meanwhile, he was on the presidential campaign trail taking major
contributions from telecom and cable giants, including AT&T. Within two
weeks of the introduction of his bill, ten AT&T executives had made
maximum $1,000 contributions to the campaign. The Center for Public
Integrity-campaign finance watchdogs-saw enough there to author a long
article about the appearance of impropriety in the McCain campaign. In
any event, the oversight hearing he scheduled for June 17 was delayed
until November 8. McCain raised no serious objections. The merger was
approved the following June.


Hearn also claims that we have overlooked McCain's leadership in the
passage of the Satellite Home Viewers Improvement Act of 1999. It is
true that McCain was involved in this legislation. However, McCain
actually opposed final passage of the bill. Failing to oppose
successfully is not leadership, in our view.

William E. Kennard
Reed Hundt