[Congressional Record Volume 145, Number 36 (Monday, March 8, 1999)]
[Senate]
[Pages S2432-S2434]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                      ANTITRUST MERGER REVIEW ACT

 Mr. DeWINE. Mr. President, I rise today in support of the 
``Antitrust Merger Review Act'' (S. 467), a bill that I introduced with 
Senator Kohl, the ranking minority member of the Antitrust, Business 
Rights and Competition Subcommittee.
  S. 467 is, plain and simple, a bill that imposes time limits on the 
FCC review of telecom mergers. This bill will not limit the scope of 
the FCC review, or attempt to dictate to the FCC how to evaluate these 
mergers; instead, it will simply impose a deadline for FCC action.
  As I have stated before, telecommunications mergers have a major 
impact on competition, and they require careful scrutiny from the FCC. 
However, careful scrutiny does not mean endless scrutiny. These mergers 
must be evaluated in a timely fashion, so that the merging parties and 
their competitors can move forward. The longer these deals remain under 
review the longer the market remains in limbo, and the longer it will 
be before we see vigorous competition.
  Accordingly, Senator Kohl and I have introduced S. 467, and plan to 
work with our colleagues on the Judiciary Committee and with Senator 
McCain and Senator Hollings and the rest of the Commerce Committee, to 
move this bill forward and help increase the pace of competition in the 
telecommunications industry.
 Mr. KOHL. Mr. President, I rise today in support of the 
``Antitrust Merger Review Act'' (S. 467), a bill that I introduced with 
Senator DeWine, my colleague on the Antitrust Subcommittee. This 
measure sets a deadline on the Federal Communications Commission when 
it reviews mergers. In other words, our bill says to the FCC: approve a 
merger, reject it, or apply conditions. But don't sit on it.
  All too often, telecommunication companies, their customers, and 
their employees are left to mercy of a time-consuming merger review 
process--a process in which the two lead agencies, the Department of 
Justice and the FCC, act in sequence rather than in tandem. Like the 
DOJ and the Federal Trade Commission, who have deadlines under the 
Hart-Scott-Rodino laws, there is no compelling reason to let the FCC 
``hang back'' and wait until the end.
  Our bill is simple, effective and straightforward, and sets 
reasonable time limits for the FCC to follow. When a license transfer 
application is filed, the FCC will have 30 days to decide whether or 
not a ``second request'' for further information is needed from the 
merging companies. If this second request phase is needed, the FCC will 
then have six months after receiving the additional material--so-called 
``substantial compliance''--to make a determination. For those familiar 
with antitrust laws, these time limits are nothing new or shocking. If 
anything, they make common sense by creating a framework for a timely 
decision. And this measure is entirely consistent with the thrust of 
the 1996 Telecom Act, which strengthened the hand of the antitrust laws 
in addressing telecom mergers. See, e.g., Public Law 104-104 
Sec. 601(b).
  But Mr. President, let me also tell you what this bill is not. First, 
while our measure sets time limits on the FCC's merger review process, 
it does not change the FCC's substantive role in approving or rejecting 
these deals. Others have suggested doing this, but many of us believe 
that the FCC through application of its ``public interest test'' can 
obtain market-opening concessions from merging companies that the DOJ, 
under antitrust laws, simply cannot. Second, though some in Congress 
may want to revisit other aspects of the Hart-Scott-Rodino antitrust 
laws, this bill is not a vehicle for substantive changes--they are best 
left for other measures at another time.
  This is not a perfect piece of legislation to be sure, but it is a 
step in the right direction. Still, it is a work in progress, so we 
plan to work together with our colleagues, Senator Hollings and Senator 
McCain, and to get input from all the affected parties. After that, we 
will ask for our colleagues' support for this bipartisan proposal, 
which will help companies get on with their businesses, and employees 
and consumers get on with their lives.
  Finally, Mr. President, I ask that the text of the bill be printed in 
the Record.
  The text of the bill follows:

                                 S. 467

       Be it enacted by the Senate and House of Representatives of 
     the United States of America in Congress assembled,

     SECTION 1. SHORT TITLE.

       This Act may be cited as the ``Antitrust Merger Review 
     Act''.

     SEC. 2. RESTATEMENT AND IMPROVEMENT OF SECTION 7A OF THE 
                   CLAYTON ACT.

       (a) In General.--Section 7A of the Clayton Act (15 U.S.C. 
     18a) is amended to read as follows:
       ``Sec. 7A. (a) Except as exempted pursuant to subsection 
     (c), no person shall acquire, directly or indirectly, any 
     voting securities or assets of any other person, unless both 
     persons (or in the case of a tender offer, the acquiring 
     person) file notification pursuant to rules under subsection 
     (d)(1) and the waiting period described in subsection (b)(1) 
     has expired, if--
       ``(1) the acquiring person, or the person whose voting 
     securities or assets are being acquired, is engaged in 
     commerce or in any activity affecting commerce;
       ``(2)(A) any voting securities or assets of a person 
     engaged in manufacturing which has annual net sales or total 
     assets of $10,000,000 or more are being acquired by any 
     person which has total assets or annual net sales of 
     $100,000,000 or more;
       ``(B) any voting securities or assets of a person not 
     engaged in manufacturing which has total assets of 
     $10,000,000 or more are being acquired by any person which 
     has total assets or annual net sales of $100,000,000 or more; 
     or
       ``(C) any voting securities or assets of a person with 
     annual net sales or total assets of $100,000,000 or more are 
     being acquired by any person with total assets or annual net 
     sales of $10,000,000 or more; and
       ``(3) as a result of such acquisition, the acquiring person 
     would hold--
       ``(A) 15 per centum or more of the voting securities or 
     assets of the acquired person, or
       ``(B) an aggregate total amount of the voting securities 
     and assets of the acquired person in excess of $15,000,000.

     In the case of a tender offer, the person whose voting 
     securities are sought to be acquired by a person required to 
     file notification under this subsection shall file 
     notification pursuant to rules under subsection (d).
       ``(b)(1) The waiting period required under subsection (a) 
     shall--
       ``(A) begin on the date of the receipt by the Federal Trade 
     Commission and the Assistant Attorney General in charge of 
     the Antitrust Division of the Department of Justice 
     (hereinafter referred to in this section as the `Assistant 
     Attorney General') of--
       ``(i) the completed notification required under subsection 
     (a), or
       ``(ii) if such notification is not completed, the 
     notification to the extent completed and a statement of the 
     reasons for such noncompliance,

     from both persons, or, in the case of a tender offer, the 
     acquiring person; and
       ``(B) end on the thirtieth day after the date of such 
     receipt (or in the case of a cash tender offer, the fifteenth 
     day), or on such later date as may be set under subsection 
     (e)(2) or (g)(2).
       ``(2) The Federal Trade Commission and the Assistant 
     Attorney General may, in individual cases, terminate the 
     waiting period specified in paragraph (1) and allow any 
     person to proceed with any acquisition subject to this 
     section, and promptly shall cause to be published in the 
     Federal Register a notice that neither intends to take any 
     action within such period with respect to such acquisition.
       ``(3) As used in this section--
       ``(A) The term `voting securities' means any securities 
     which at present or upon conversion entitle the owner or 
     holder thereof to vote for the election of directors of the 
     issuer or, with respect to unincorporated issuers, persons 
     exercising similar functions.
       ``(B) The amount or percentage of voting securities or 
     assets of a person which are acquired or held by another 
     person shall be determined by aggregating the amount or 
     percentage of such voting securities or assets held or 
     acquired by such other person and each affiliate thereof.
       ``(c) The following classes of transactions are exempt from 
     the requirements of this section--
       ``(1) acquisitions of goods or realty transferred in the 
     ordinary course of business;
       ``(2) acquisitions of bonds, mortgages, deeds of trust, or 
     other obligations which are not voting securities;
       ``(3) acquisitions of voting securities of an issuer at 
     least 50 per centum of the voting securities of which are 
     owned by the acquiring person prior to such acquisition;
       ``(4) transfers to or from a Federal agency or a State or 
     political subdivision thereof;
       ``(5) transactions specifically exempted from the antitrust 
     laws by Federal statute;
       ``(6) transactions specifically exempted from the antitrust 
     laws by Federal statute if approved by a Federal agency, if 
     copies of all information and documentary material filed with 
     such agency are contemporaneously filed with the Federal 
     Trade Commission and the Assistant Attorney General;

[[Page S2433]]

       ``(7) transactions which require agency approval under 
     section 10(e) of the Home Owners' Loan Act (12 U.S.C. 1467a), 
     section 18(c) of the Federal Deposit Insurance Act (12 U.S.C. 
     1828(c)), or section 3 of the Bank Holding Company Act of 
     1956 (12 U.S.C. 1842);
       ``(8) transactions which require agency approval under 
     section 4 of the Bank Holding Company Act of 1956 (12 U.S.C. 
     1843) or section 5 of the Home Owners' Loan Act (12 U.S.C. 
     1464), if copies of all information and documentary material 
     filed with any such agency are contemporaneously filed with 
     the Federal Trade Commission and the Assistant Attorney 
     General at least 30 days prior to consummation of the 
     proposed transaction;
       ``(9) acquisitions, solely for the purpose of investment, 
     of voting securities, if, as a result of such acquisition, 
     the securities acquired or held do not exceed 10 per centum 
     of the outstanding voting securities of the issuer;
       ``(10) acquisitions of voting securities, if, as a result 
     of such acquisition, the voting securities acquired do not 
     increase, directly or indirectly, the acquiring person's per 
     centum share of outstanding voting securities of the issuer;
       ``(11) acquisitions, solely for the purpose of investment, 
     by any bank, banking association, trust company, investment 
     company, or insurance company, of (A) voting securities 
     pursuant to a plan of reorganization or dissolution; or (B) 
     assets in the ordinary course of its business; and
       ``(12) such other acquisitions, transfers, or transactions, 
     as may be exempted under subsection (d)(2)(B).
       ``(d) The Federal Trade Commission, with the concurrence of 
     the Assistant Attorney General and by rule in accordance with 
     section 553 of title 5, United States Code, consistent with 
     the purposes of this section--
       ``(1) shall require that the notification required under 
     subsection (a) be in such form and contain such documentary 
     material and information relevant to a proposed acquisition 
     as is necessary and appropriate to enable the Federal Trade 
     Commission and the Assistant Attorney General to determine 
     whether such acquisition may, if consummated, violate the 
     antitrust laws; and
       ``(2) may--
       ``(A) define the terms used in this section;
       ``(B) exempt, from the requirements of this section, 
     classes of persons, acquisitions, transfers, or transactions 
     which are not likely to violate the antitrust laws; and
       ``(C) prescribe such other rules as may be necessary and 
     appropriate to carry out the purposes of this section.
       ``(e)(1) The Federal Trade Commission or the Assistant 
     Attorney General may, prior to the expiration of the 30-day 
     waiting period (or in the case of a cash tender offer, the 
     15-day waiting period) specified in subsection (b)(1), 
     require the submission of additional information or 
     documentary material relevant to the proposed acquisition, 
     from a person required to file notification with respect to 
     such acquisition under subsection (a) prior to the expiration 
     of the waiting period specified in subsection (b)(1), or from 
     any officer, director, partner, agent, or employee of such 
     person.
       ``(2) The Federal Trade Commission or the Assistant 
     Attorney General, in its or his discretion, may extend the 
     30-day waiting period (or in the case of a cash tender offer, 
     the 15-day waiting period) specified in subsection (b)(1) for 
     an additional period of not more than 20 days (or in the case 
     of a cash tender offer, 10 days) after the date on which the 
     Federal Trade Commission or the Assistant Attorney General, 
     as the case may be, receives from any person to whom a 
     request is made under paragraph (1), or in the case of tender 
     offers, the acquiring person, (A) all the information and 
     documentary material required to be submitted pursuant to 
     such a request, or (B) if such request is not fully complied 
     with, the information and documentary material submitted and 
     a statement of the reasons for such noncompliance. Such 
     additional period may be further extended only by the United 
     States district court, upon an application by the Federal 
     Trade Commission or the Assistant Attorney General pursuant 
     to subsection (g)(2).
       ``(f) If a proceeding is instituted or an action is filed 
     by the Federal Trade Commission, alleging that a proposed 
     acquisition violates section 7 of this Act or section 5 of 
     the Federal Trade Commission Act, or an action is filed by 
     the United States, alleging that a proposed acquisition 
     violates such section 7 or section 1 or 2 of the Sherman Act, 
     and the Federal Trade Commission or the Assistant Attorney 
     General (1) files a motion for a preliminary injunction 
     against consummation of such acquisition pendente lite, and 
     (2) certifies the United States district court for the 
     judicial district within which the respondent resides or 
     carries on business, or in which the action is brought, that 
     it or he believes that the public interest requires relief 
     pendente lite pursuant to this subsection, then upon the 
     filing of such motion and certification, the chief judge of 
     such district court shall immediately notify the chief judge 
     of the United States court of appeals for the circuit in 
     which such district court is located, who shall designate a 
     United States district judge to whom such action shall be 
     assigned for all purposes.
       ``(g)(1) Any person, or any officer, director, or partner 
     thereof, who fails to comply with any provision of this 
     section shall be liable to the United States for a civil 
     penalty of not more than $10,000 for each day during which 
     such person is in violation of this section. Such penalty may 
     be recovered in a civil action brought by the United States.
       ``(2) If any person, or any officer, director, partner, 
     agent, or employee thereof, fails substantially to comply 
     with the notification requirement under subsection (a) or any 
     request for the submission of additional information or 
     documentary material under subsection (e)(1) within the 
     waiting period specified in subsection (b)(1) and as may be 
     extended under subsection (e)(2), the United States district 
     court--
       ``(A) may order compliance;
       ``(B) shall extend the waiting period specified in 
     subsection (b)(1) and as may have been extended under 
     subsection (e)(2) until there has been substantial 
     compliance, except that, in the case of a tender offer, the 
     court may not extend such waiting period on the basis of a 
     failure, by the person whose stock is sought to be acquired, 
     to comply substantially with such notification requirement or 
     any such request; and
       ``(C) may grant such other equitable relief as the court in 
     its discretion determines necessary or appropriate,

     upon application of the Federal Trade Commission or the 
     Assistant Attorney General.
       ``(h) Any information or documentary material filed with 
     the Assistant Attorney General or the Federal Trade 
     Commission pursuant to this section shall be exempt from 
     disclosure under section 552 of title 5, United States Code, 
     and no such information or documentary material may be made 
     public, except as may be relevant to any administrative or 
     judicial action or proceeding. Nothing in this section is 
     intended to prevent disclosure to either body of Congress or 
     to any duly authorized committee or subcommittee of Congress.
       ``(i)(1) Any action taken by the Federal Trade Commission 
     or the Assistant Attorney General or any failure of the 
     Federal Trade Commission or the Assistant Attorney General to 
     take any action under this section shall not bar any 
     proceeding or any action with respect to such acquisition at 
     any time under any other section of this Act or any other 
     provision of law.
       ``(2) Nothing contained in this section shall limit the 
     authority of the Assistant Attorney General or the Federal 
     Trade Commission to secure at any time from any person 
     documentary material, oral testimony, or other information 
     under the Antitrust Civil Process Act, the Federal Trade 
     Commission Act, or any other provision of law.
       ``(j) Beginning not later than January 1, 1978, the Federal 
     Trade Commission, with the concurrence of the Assistant 
     Attorney General, shall annually report to Congress on the 
     operation of this section. Such report shall include an 
     assessment of the effects of this section, of the effects, 
     purpose, and need for any rules promulgated pursuant thereto, 
     and any recommendations for revisions of this section.
       ``(k)(1) The consideration by the Federal Communications 
     Commission of any application for a transfer of license, or 
     the acquisition and operation of lines, that is associated 
     with an acquisition subject to this section shall be governed 
     by the procedures set forth in this subsection.
       ``(2)(A) Upon receipt of an application referred to in 
     paragraph (1), the Federal Communications Commission may 
     submit to the party or parties covered by the application a 
     request for any documents and information necessary for 
     consideration of the transfer of license, or acquisition and 
     operation of lines, addressed in the application.
       ``(B) The Federal Communications Commission shall submit a 
     request under subparagraph (A), if at all, not later than 30 
     days after receipt of the application in question.
       ``(3)(A) A party subject to a request from the Federal 
     Communications Commission under paragraph (2) shall submit to 
     the Federal Communications Commission the documents and 
     information identified in the request.
       ``(B) At the completion of the submission to the Federal 
     Communications Commission of documents and information 
     pursuant to a request under subparagraph (A), the party 
     submitting such documents and information shall certify to 
     the Federal Communications Commission whether or not such 
     party has complied substantially with the request.
       ``(4) Whenever consideration of an application referred to 
     in paragraph (1) includes one or more requests for documents 
     and information under paragraph (2), the Federal 
     Communications Commission shall complete the consideration of 
     the application not later than 180 days after the date on 
     which all parties covered by such requests have certified to 
     the Federal Communications Commission under paragraph (3)(B) 
     that such parties have complied substantially with such 
     requests.
       ``(5)(A) In any case in which the Federal Communications 
     Commission does not request under paragraph (2) any documents 
     and information for the consideration of an application 
     referred to in paragraph (1), the Federal Communications 
     Commission shall approve or deny the transfer of license, or 
     the acquisition and operation of lines, covered by the 
     application not later than 30 days after the date of the 
     submittal of the application to the Federal Communications 
     Commission.
       ``(B) In any case in which the Federal Communications 
     Commission requests under paragraph (2) documents and 
     information for the consideration of an application referred 
     to in paragraph (1), the Federal Communications Commission 
     shall approve or deny the

[[Page S2434]]

     transfer of license, or the acquisition and operation of 
     lines, covered by the application on the date of the 
     completion of consideration of the application under 
     paragraph (4).
       ``(C) If the Federal Communications Commission does not 
     approve or deny an application for a transfer of license, or 
     for the acquisition and operation of lines, by the date set 
     forth in subparagraph (A) or (B), whichever applies, the 
     application shall be deemed approved by the Federal 
     Communications Commission as of such date. Approval under 
     this subparagraph shall be without conditions.
       ``(6)(A) Any party seeking to challenge the reasonableness 
     of a request of the Federal Communications Commission under 
     paragraph (2) shall bring an action in the United States 
     District Court of the District of Columbia seeking a 
     declaratory judgment or injunctive relief with respect to 
     that challenge.
       ``(B) In seeking to challenge the compliance under 
     paragraph (3) of a party with a request under paragraph (2), 
     the Federal Communications Commission shall bring an action 
     in the United States District Court of the District of 
     Columbia seeking a declaratory judgment or injunctive relief 
     with respect to that challenge.
       ``(C) The period of an action under this paragraph may not 
     be taken into account in determining the passage of time 
     under a deadline under this subsection.
       ``(7) No provision of this subsection may be construed to 
     limit or modify--
       ``(A) the standards utilized by the Federal Communications 
     Commission under the Communications Act of 1934 (47 U.S.C. 
     151 et seq.) in considering or approving transfers of 
     licenses, or the acquisition and operation of lines, covered 
     by an application referred to in paragraph (1); or
       ``(2) the authority of the Federal Communications 
     Commission under that Act to impose conditions upon the 
     transfer of licenses, or the acquisition and operation of 
     lines, pursuant to such consideration or approval.
       ``(8) Subsection (g)(1) shall not apply with respect to the 
     activities of a party under this subsection.''.
       (b) Effective Date.--(1) Except as provided in paragraph 
     (2), the amendment made by subsection (a) shall take effect 
     on the date of the enactment of this Act.
       (2) Subsection (k) of section 7A of the Clayton Act, as 
     amended by subsection (a) of this section, shall take effect 
     30 days after the date of the enactment of this Act, and 
     shall apply with respect to applications referred to in such 
     subsection (k) that are submitted to the Federal 
     Communications Commission on or after that date.

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