Although announced almost a year ago, the proposed merger of Comcast and NBC Universal is still stalled at the Federal Communications Commission (FCC), one of the two federal agencies that must say it’s OK for the two businesses to merge.
According to reports, the FCC and the U.S. Department of Justice will impose conditions in order for the merger to finally move forward. This is just the latest example of a growing tendency for federal agencies to make policy through the antitrust merger review process—extracting policy commitments from companies while they are at the mercy of a regulatory agency. This process allows the federal government to become heavily involved in regulating otherwise unregulated or lightly regulated areas of the marketplace—attempting to achieve the regulators’ goals through the unique and exceptional processes available to them during a merger review.
Perhaps most importantly, taking a year or more to approve mergers, is simply unacceptable in this day. Innovation and technology move fast, measured not in years but in weeks. Regulatory interference in the process should be minimal. If there are issues to be reviewed then they should be reviewed quickly and precisely and with a blind eye to political arguments.
In addition, policy making in this way is policy making under duress. Policy concessions extracted as a condition of a merger inevitably obtain the power of precedent, even though they were obtained without anything resembling a deliberative policy process. Moreover, extremely subjective rules, such as those applied to only one entity, are the worst rules because they dramatically bias the marketplace, depriving consumers of a competitor who is able to bring the best prices, products and services to bear. To say the least, policymaking in this way is wrong.
In this case, with rampant and growing competition in the video marketplace, one wonders why conditions would be contemplated for any reason other than pure politics. This is a clear case where government can either impede the market or let it flourish.
The FCC has a decision to make–to impede dynamic and innovative companies serving consumers in a competitive marketplace, or to get out of the way of an exciting future.