FCC

Dems Say Securus Decision Reads Public Interest Out of Review

Pai says proposed conditions were not merger-specific 10/30/2017 6:51 PM Eastern

FCC Democrats say the commission's approval of a $1.6 billion deal involving prison phone service company Securus is a disturbingly precedent-setting transfer that they say reads the public interest out of the transfer of control equation.

The majority voted to approve the deal along with a $1.7 million fine for misleading the agency in information about its transfer of control to Platinum Equity, LLC.

"Is this transfer of control and consent decree just a slap on the wrist? More like a pat on the back," said Democratic Commissioners Mignon Clyburn and Jessica Rosenworcel in their dissent. "And it is precedent-setting. Until now, the FCC has never granted a transfer of control when a company has made misrepresentations during the review process. We could have adopted conditions on the transaction to mitigate public interest harms. Indeed, we suggested several, but the Chairman respectfully declined to act on any of them, including a condition to ensure that the company could not decline to serve incarcerated people with disabilities."

But their issues were larger than prison cells.

"The Communications Act instructs the Commission to consider the public interest when it reviews a transaction," they wrote. "A deeply-rooted preference to protect and promote competition in relevant markets, accelerate deployment of advanced services, ensure a diversity of license holdings, and manage spectrum in the public interest, have traditionally been a part of this consideration. However, today’s item sets an ominous precedent by narrowing the Commission’s standard of review to effectively take the public interest out of the equation. By doing so, we shirk our responsibility under the Act."

The $1.7 million consent decree settles an Enforcement Bureau investigation, concluding that a deal that "involves a transfer of control to a holding company entity with no competing operations and that was not involved in the violations of FCC rules, imposes no public interest harms."

Pai also suggested another punishment was that the misrepresentation was meant to speed the transfer, but instead delayed it.

Those doing business in front of the agency should take note of that fact. They should also note that while Applicants urged quick approval to avoid incurring fees, in the companion decree Securus will pay a civil penalty of $1.7 million

because of their lack of candor, a particularly large amount for this type of violation."

The Democrats suggested some conditions, but the did not make it onto the deal.

"[I]t’s important to understand that none of the conditions that it’s been suggested we impose here are transaction-specific — that is, they have nothing to do with remedying a transaction-specific harm .  And as the standard of review in this document makes clear, a transaction is not an opportunity to apply extraneous conditions upon a licensee."

Pai has long argued that his predecessor tried to regulate general practices through what was supposed to be merger-specific conditions.

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