TMT with Mike O'Rielly – Ep 19: Keynote Convo at FSF's 17th Annual Conference

Episode 19 of "TMT with Mike O'Rielly," a videocast featuring former FCC Commissioner and Adjunct Senior Fellow at the Free State Foundation Michael O'Rielly, was released on April 2. In this episode, titled "The Free State Foundation's Seventeenth Annual Policy Conference," Mr. O'Rielly has a conversation at #FSFConf17 with guests FTC Commissioner Melissa Holyoak, FCC Commissioner Nathan Simington, and former FCC Chairman Ajit Pai. Their conversation ranges a number of communications, competition, and administrative agency-related topics. Streaming video of the episode is now available: 

FCC Should Keep Verizon/Frontier Merger Clean From Extraneous Conditions

Today, April 2, Communications Daily reported on dueling ex parte filings in the Verizon/Frontier merger review proceeding. The Coalition for IP Transition has urged the FCC to condition any prospective agency approval of the merger on IP interconnection-related requirements. However, the Coalition doesn't identify any specific harms arising from the merger. Under prevailing agency precedents (even if sometimes breached to achieve pro-regulatory ends), merger conditions may only be imposed to remedy transaction-specific harms. 

In its ex parte filing, the Coalition for IP Transition raised what they call "the serious problems faced by competitorsbecause of the Applicants and other price cap Local Exchange Carriers ('LECs') refusals to interconnect on an IP-basis, despite offering IP services to other customers" (emphasis added). Notably, the Coalition addresses the practices of price cap LECs' generally, and not just those of Verizon and Frontier. Also, in the alternative to imposing conditions on the agency's prospective approval of the proposed Verizon/Frontier merger, the Coalition "urged the Commission to consider ordering all price cap LECs" to meet certain disclosure, IP interconnection, and access charge-related requirements. Such an order would require agency action through a separate, industry-wide proceeding. 

 

Thus, on its face, the Coalition's ex parte filing is addressed to matters pertaining to the entire voice services market. Accordingly, the Coalition does not raise potential harms that would arise from the Verizon/Frontier merger. Communications Daily reported that Verizon and Frontier responded by making those same points about non-transaction-specific matters. But one need not take the merging parties' word for it. The Coalition's filing makes it plain. 

 

Regardless of one's policy view about tech transitions from TDM to all-IP networks, network interconnection, and access charges in the voice services market, those matters should be addressed, if at all, through separate inquiry or rulemaking proceedings applicable to the entire market – and not through transactions involving only two merging parties. The Commission should not impose the non-transaction-specific conditions requested by the Coalition. 

 

Moreover, the Commission should be mindful that there is a dwindling amount of time left on the agency's informal "shot clock" for completing its review of the proposed Verizon/Frontier. During review periods, merging parties are vulnerable to lost economic opportunity and regulatory uncertainty costs that can undermine their competitiveness. The agency should complete its review and decide before the deadline expires, if not sooner. 

 

For a brief background on the Verizon/Frontier merger, see my blog post from February 5 of this year, "Verizon/Frontier Merger Would Make Fiber and Fixed Wireless More Competitive."