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Press Release Monday, June 5, 2000 |
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WASHINGTON, D.C. -- Gene Kimmelman, co-director of Consumers Union
(CU)'s Washington DC office, today said the Federal Communications
Commission's approval of the merger of AT&T and MediaOne "defies
logic" and "smacks of political favoritism for one company," citing
the fact that the merger would violate the FCC's cable ownership
limits.
Kimmelman said CU would seek to have the decision overturned in
court. He said the organization would also ask Congress to
restructure the FCC's merger authority in light of the Commission
"blatantly undermin[ing] its legal mandate to protect the
public from monopolistic abuses."
"In clearing the AT&T/MediaOne merger, the FCC has disregarded
critical facts, its own rules and legal standards to help one giant
cable monopoly expand its dominance over the cable television and
broadband Internet markets," Kimmelman said.
"Rather than use its merger authority to protect the public
against an expanding monopoly, the Commission has allowed AT&T to
extend the reach of its cable and broadband Internet service
monopolies and extended the time during which it can abuse consumers
and harm potential competitors.
"Rather than apply clear rules prohibiting one cable company from
controlling more than 30 percent of the cable market, the Commission
has created an enormous loophole which grants AT&T substantial
control over more than 40 percent of the market if it sells its
interests in programming.
"And rather than address the Justice Department's antitrust
finding that narrowband Internet services do not compete with
broadband Internet services, the Commission has done nothing to
prevent AT&T from discriminating against independent Internet
service providers for the more than 40 percent of the U.S. cable
households that AT&T will have substantial control over.
"This decision is so inconsistent with the Commission's own
factual depiction of AT&T's market dominance that it defies
logic. It is so inconsistent with the standards of proving that a
merger is in the public interest, as articulated by the FCC in its
Bell Atlantic/Nynex decision and all relevant mergers since then,
that it is legally suspect. And this decision has so clearly
undermined the barrier to expanding cable monopolies Congress called
for through establishment of a cable ownership cap, that it smacks of
political favoritism for one company.
"Because the FCC clearly failed to meet its own public interest
standard or abide by its cable ownership and procedural rules in
approving this merger, Consumers Union will seek to have the decision
overturned in court as arbitrary and capricious. But more
importantly, because the FCC has blatantly undermined its legal
mandate to protect the public from monopolistic abuses, we will ask
Congress to restructure the FCC's authority to prevent this from
happening again in the future."
Consumers Union, publisher of Consumer Reports magazine, is an independent nonprofit testing, educational and information organization serving only the consumers. We are a comprehensive source of unbiased advice about products and services, personal finance, health, nutrition and other consumer concerns. Since 1936, our mission has been to test products, inform the public and protect consumers.
