April 27, 2005
Telecommunications partner Philip Verveer testifies at an oversight hearing conducted by the House Judiciary Committee on competition and consolidation in the telecommunications industry.
Telecommunications partner Philip Verveer recently testified at an oversight hearing conducted by the House Judiciary Committee on competition and consolidation in the telecommunications industry. Nine years after the passage of the Telecom Act of 1996, the hearing was called to examine whether revision of the Telecom Act is necessary to advance telecom competition. The Committee also asked the panel of expert witnesses to address whether a new round of telecom mergers would benefit consumers, and what steps Congress can take to ensure the vitality of competition in the telecom industry. Mr. Verveer told the Committee that “Despite appalling losses of employment and investment with all of their attendant dislocations, there is genuine reason to regard the performance of the telecommunications sector as good and equally genuine reason to protect the process that produced the performance.” He testified that this will be a challenge as the telecom marketplace is currently in the “early stage of a fundamental transformation.” He cautioned that while the marketplace nine years after passage of the Telecom Act offers consumers great promise, there is some risk. “The promise is a function of extraordinarily favorable developments in technology combined with competitive imperatives to reduce the developments to practice and bring them to the marketplace quickly. The risk resides in the equally extraordinarily institutional upheaval affecting the production of telecommunications services.” Mr. Verveer addressed the difficulty convergence is imposing on the ability to assess the competitive effects of consolidation. He stated that “Both the definition of product market and the identification of suppliers of the product become a great deal more difficult.” He testified further that disruptive technology, especially digital, is also significantly contributing to the difficulty in assessing the state of competition. He urged lawmakers to “proceed cautiously” and to carefully consider the diminishing effects recent judicial decisions have had on our antitrust laws, especially the Sherman Act. Mr. Verveer has spent over thirty years considering these matters, as a Justice Department attorney in the historic breakup of AT&T, as bureau chief at the FCC, and as a private attorney at Willkie.