Policy Documents

Section 652 Cross-Ownership Ban Shouldn't Apply to Cable Operators and CLECs

Seth L. Cooper –
August 3, 2011

U.S. Department of Justice Antitrust Division Chief Christine Varney declared in 2009 that "the vast majority of mergers are either procompetitive and enhance consumer welfare or are competitively benign."1 But if so, why impose unnecessary regulatory barriers to achieving procompetitive, proconsumer telecom mergers?

Consider the case of Communications Act, Section 652.

Section 652’s near total ban on mergers between cable operators and local exchange carriers was once understood to apply only to mergers involving incumbent local exchange carriers (ILECs) historically possessing monopolies over local voice services. Unfortunately, the FCC's 2010 Comcast-CIMCO merger order applied Section 652's cross-ownership restriction to a cable operator acquiring a competitive local exchange carrier (CLEC)...