Cantwell Urges FTC Nominee to Investigate Gas Price Spikes, Go After Market Manipulators
Cantwell at hearing: ‘The West Coast has been hit by high fuel prices and refinery shutdowns’
WASHINGTON, D.C. – With gas prices over $3-per-gallon for 1,000 straight days, U.S. Senator Maria Cantwell (D-WA) secured a commitment today from the Obama Administration’s nominee for Federal Trade Commission (FTC) commissioner to use the FTC’s power to investigate gas price spikes and potential oil market manipulation.
During today’s Senate Committee on Commerce, Science, and Transportation hearing, Cantwell also urged the Administration’s nominee for the Federal Communications Commission (FCC) to fight media consolidation.
Cantwell asked the FTC nominee, Ms. Terrell McSweeny, whether she would push for the commission to use FTC anti-manipulation authority if confirmed. President Obama announced McSweeny’s nomination on June 21, 2013, to fill an open seat on the commission.
Video of today’s hearing available here.
“The West Coast has been hit by high fuel prices and refinery shutdowns,” said Cantwell to McSweeny at today’s hearing. “I wanted to get a sense from you if you will work to ensure that the FTC uses this authority of anti-manipulation to investigate anomalous gas prices and to make sure that the markets are safe from manipulation and anti-competitive behavior.”
Ms. Terrell McSweeny replied: “Yes, Senator, absolutely. I think it’s very important. And as we discussed, fuel and energy costs really hit consumers directly in their pocketbook very quickly. So I think it is a very important priority.”
Cantwell wrote the law making manipulation of wholesale oil markets illegal, and has been a leader in urging the FTC to aggressively pursue oil market manipulators. Her legislation, which became law in 2007, empowers the FTC to levy civil penalties of up to $1 million per day. She has continued to fight for reining in excessive oil speculation, calling on federal regulators to implement overdue rules in the energy futures markets.
In a hearing at the Senate Commerce Committee on December 4, 2012, to consider the appointment of Joshua D. Wright to the FTC, Cantwell said she wouldn’t support any FTC nominee who is not committed to enforcing the 2007 law she authored that gives the FTC authority and responsibility to protect consumers from oil market manipulation.
Cantwell’s spearheaded a letter in November 2012 with six West Coast senators to the Department of Justice urging the Oil and Gas Price Fraud Working Group to investigate whether market manipulation or false reporting by oil refineries contributed to near-record gas prices in Western states in 2012. On June 7, 2012, Cantwell urged the FTC to take a more aggressive role in policing potential oil market manipulation.
During today’s hearing of the U.S. Senate Commerce Committee, Cantwell also asked Mr. Michael O’Rielly, the nominee to be a commissioner at the FCC, if he would consider the impact consolidation could have on media diversity if appointed. President Obama announced O’Rielly’s nomination on August 1, 2013, to fill an open seat on the commission.
“I can guarantee you – because Seattle will turn out thousands of people at a moment’s notice to debate this issue – that they don’t like to be force-fed by a concentration of media that says ‘this is what you are going to hear or this is what you are going to listen to,’ Cantwell said to O’Rielly. “So I hope you will look at that issue the same way you are looking at this Internet issue and come to grips with the fact that a concentration, even the courts are saying, is a big problem.”
O’Rielly replied: “Yes Senator, I commit to you I will.”
Currently, the FCC is reviewing media ownership rules. Cantwell has consistently spoken out against the approval of rules that encourage further media consolidation.
“While increased media consolidation may be good for Wall Street, it is bad for Main Street,” Cantwell said in 2011.
Her comment was in response to the FCC’s vote to move ahead with a notice of proposed rulemaking that would enable large media companies to more easily own a daily newspaper and operate a television or radio station in the same market.During a nomination hearing at the Senate Commerce Committee on June 19, 2013, Cantwell warnedthe Obama Administration’s nominee for the FCC chair, Thomas Wheeler, that media cross-ownership and shared services agreements should not become a backdoor to further media consolidation.
In March 2013, Cantwell voiced her support for pursuing a Resolution of Disapproval against the FCC if its media ownership rules urge further media consolidation. In a letter to then FCC Chairman Julius Genachowski and his fellow commissioners in November 2012, Cantwell also expressed disappointment that discussion on a draft order with the potential to ease media ownership rules was taking place behind closed doors. Previously, in December 2011, Cantwell expressed disapproval with a FCC vote to move forward with the proposed rules.
A full transcript of the hearing follows:
Senator Cantwell: Ms. McSweeny, we had a chance to talk a little bit about the new authority that the FTC was given as it relates to market manipulation on fuel prices. And obviously the West Coast has been hit by high fuel prices and refinery shutdowns. So I wanted to get a sense from you if you will work to ensure that the FTC uses this authority of anti-manipulation to investigate anomalous gas prices and to make sure that the markets are safe from manipulation and anti-competitive behavior?
Ms. Terrell McSweeny, nominee for commissioner at Federal Trade Commission: Yes Senator, absolutely. I think it’s very important. And as we discussed, fuel and energy costs really hit consumers directly in their pocket very quickly. So, I think it is a very important priority.
Senator Cantwell: What do you think you bring to the FTC to get them to understand this shift in policy? What can they do to work with other agencies – either in a task force environment – to accomplish this kind of oversight?
Ms. Terrell McSweeny: Well I certainly understand the benefit of inter-agency collaborations. We do that at the anti-trust division at the Department of Justice to combat fraud. I think it is very important. And I’d be happy to commit to working with our sister independent commissions as well as other agencies with expertise. I look forward to learning more about what the FTC is doing and look forward to speaking with all of my fellow commissioners about that if I am confirmed.
Senator Cantwell: How big of an issue do you think the issue of gas prices are for consumers?
Ms. Terrell McSweeny: I am not an expert on that question but I am a consumer and I appreciate that energy costs can be very significant. I’ve worked on middle-class economic security policies for most of my career and understand how very real that pressure can be on families. Particularly when they have tight budgets. So I think it is a very important issue and I understand your concern with it.
Senator Cantwell: Thank you. Mr. O’Rielly, in your area of policy the issue of media ownership is one that residents of my state are very interested in and will continue to be interested in for a long period of time. Do you think that in some of these individual markets that broadcasters are abusing this ability on these joint agreements and effectively are getting around what is currently there to set limits on media ownership? They’ll basically come in and virtually work together on all of the activities except for 15 percent as a way to say ‘okay we are not crossing that line.’ But in reality they are.
Mr. Michael O’Rielly, nominee for commissioner at Federal Communications Commission: Thank you, Senator, for the question. I would say first, the commission has an obligation to complete its Media Ownership Proceeding as required by the deadline as established by the Congress. And it has not done so. So we are long past the question of answering a number of different media ownership limitations – whether they should be relaxed or kept the same. And that gets to the part of your question that is, are companies using a number of different arrangements to get around those situations given that the rules have not been relaxed? And I would say that there are situations where companies are trying to work within the current environment of the media landscape that they would like to do things that if the commission would move forward on its proceeding.
Senator Cantwell: Well how do you look at the issue overall given that they haven’t completed it, but yet here’s a Congress that in a bipartisan fashion has said you have to have a diversity of voices and your current rulings haven’t achieved that? What would you bring?
Mr. Michael O’Rielly: So I would want to look at the complete record in the situation. There have been a number of studies done by the commission. The commission just concluded one study by an outside party on this question. And I would want to look at the entire record. I am open to exploring, given what the record would suggest, relaxing some of the media ownership rules but I would want to look at the entire record and hear from all stakeholders.
Senator Cantwell: Well, I’m very concerned about relaxing the ownership rules and having a consolidation of voices. So, I’m impressed by your statement now twice about the Internet and understanding that it moves a lot faster than we do. So I’m glad you get and understand that. That means a lot of policies that we could pass will be moved by the time they are actually implemented. At the same time, I think a lot of people in the media space are trying to use the Internet as an excuse to say we ought to have a concentration of voices. And I can guarantee you – because Seattle will turn out thousands of people at a moment’s notice to debate this issue – that they don’t like to be force-fed by a concentration of media that says ‘this is what you are going to hear’ or ‘this is what you are going to listen to.’ We wouldn’t have the alternative music scene, we wouldn’t have a lot of different things in Seattle if we didn’t have a lot of diversity. So I hope you will look at that issue the same way you are looking at this Internet issue and come to grips with the fact that a concentration, even the courts are saying, is a big problem.
Mr. Michael O’Rielly: Yes Senator, I commit to you I will.
Senator Cantwell: Thank you.
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