Friday, June 01, 2012

FCC Shouldn't Run Out The Clock In Clearing Cableco/CLEC Merger Restrictions

Nearly one calendar year since NCTA filed its conditional petition for forbearance from any restrictions on cableco/CLEC mergers under Section 652. On May 30 the FCC granted itself a 90-day extension of its shot clock.
In an August 2011 FSF Perspectives essay I argued that the "Section 652 Cross-Ownership Ban Shouldn't Apply to Cable Operators and CLECs." Banning or otherwise imposing special restrictions cableco/CLEC mergers makes no sense in an advanced telecommunications market characterized by convergence and cross-platform competition. Regulatory restrictions discouraging such mergers can also result in the foregone transactions that create efficiencies and enhance competition to the overall benefit of consumers.
I mentioned in a March blog post that the FCC has yet to take action. Unfortunately, it looks like the FCC has again fallen back into its pattern of prolonging forbearance proceedings.
 Section 10 provides that forbearance petitions not acted upon within one year's time or within a year plus 90 days in the case of an extension will be "deemed granted" by operation of law. The deemed granted provision is a deregulatory tool and provides an important backstop to agency delay. Hopefully, the FCC will issue an order in this proceeding well before the extended shotclock expires. Either through a declaratory ruling or by granting forbearance relief, the FCC should make clear that Section 652's do not apply to cableco/CLEC mergers.