FTC WANTS JURISDICTION OVER COMMON CARRIER ADS, MURIS SAYS
If Congress were willing to make statutory change, FTC Chmn. Timothy Muris said he would like agency to pursue consumer protection and deceptive advertising jurisdiction over common carriers. Speaking at Consumer Federation of America (CFA) meeting Fri., he acknowledged CFA’s interest in telecom issues, but said FTC hadn’t been able to address consumer protection concerns over common carriers because it lacked jurisdiction but said it “clearly” should have such jurisdiction. Muris said Congress exempted FTC from all common carrier issues, including consumer protection, when it gave jurisdiction to FCC, so FTC can’t deal with “simplest” of cases because of exemption. Although FCC has consumer protection responsibilities for common carrier, Muris emphasized that FTC was expert agency on consumer protection. When asked by Communications Daily if FCC would support relinquishing jurisdiction, Muris said: “I have no idea.”
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It would take act of Congress to give FTC jurisdiction over common carriers, Muris said, and he’s been raising issue in meetings with Capitol Hill staff. He said he cited lack of such jurisdiction as one of major problems for agency’s enforcement efforts. “Many people are surprised that we don’t have jurisdiction,” Muris said. It took several court cases for FTC to gain jurisdiction over cases involving deceptive billing on 900 telephone numbers, he said, and series of cases has solidified its jurisdiction over 900 number consumer protection issues, but only Congress could give it control over common carriers.
When Congress granted common carriers exemption from FTC, there was a govt.-regulated monopoly and many consumer protection issues weren’t viable, Muris said: “In that environment, it made sense to exempt FTC.” But situation is much different under deregulation where telecom companies “engage in fierce competition,” he said: “It’s a marketplace where consumers need accurate information.” He said common carrier exemption proved problem when agency attempted to enforce “modem hijacking,” where a computer modem is changed without user’s knowledge to dial long distance number. “The parties hide behind the common carrier exemption,” he said.
Muris said FTC already worked with FCC on common carrier ad issues. In March 2000, 2 agencies announced joint effort to target misleading ads by common carriers (CD March 2 p8). They issued joint policy statement to be used by long distance companies as guidance. But then-FCC Comr. Harold Furchtgott-Roth didn’t believe FCC had resources and personnel to focus on ad issues. “With limited personnel and resources, the FCC should focus its attention on matters clearly within its jurisdiction,” he said.
Muris also used speech to defend recent merger review agreement between FTC and Justice Dept. (DoJ). He said that despite its work on AOL-Time Warner merger, agency had little expertise in media merger issues. “We felt we would lose all media cases in any event,” he said. “It was time to stop fighting for them.” Muris acknowledged agreement was controversial and CFA was strongly opposed to it. Consumer groups have expressed concerns about giving Justice complete merger review authority in media cases. Under agreement, FTC and DoJ designate industries of expertise and review all mergers in each such industry. Before agreement, which was announced officially March 5, 2 agencies had to go through process called “clearance” in which they would negotiate which was best prepared to handle case.
That negotiation process often was complicated and controversial, Muris said, citing AOL-TW merger as prime example. In fact, he said, staffs of both agencies disagreed with way industries were split, with each side feeling it gave up too much. “Both sides can’t be right,” Muris said. “Everything in dispute can’t belong to you.” When negotiating clearance, agencies look at what major merger reviews in that industry each agency has handled, he said. For purposes of that measurement, Muris said FTC had no noteworthy media merger cases in last 5 years and only 2 noteworthy cases in last decade: AOL-TW and Turner Bcstg.- TW. He said neither case counted toward FTC in merger review clearance. Turner-TW is more than 5 years old, he said. And AOL-TW doesn’t count due to conditions imposed during DoJ-FTC negotiations for clearance, he said. Negotiations between then-FTC Chmn. Robert Pitofsky and then-DoJ Antitrust Div. chief Joel Klein were very intense, Muris said, and Klein agreed to let FTC have AOL-TW merger review only on condition that FTC not count that review in future clearance negotiations.