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Just a few weeks into the new legislative year, lawmakers already have introduced nearly a dozen bills that would alter competition policies or change securities laws. Monday, Sen. Harry Reid, D-Nev., introduced an airline competition bill that could discourage mergers by empowering the Department of Transportation to regulate fares in highly concentrated markets. Called the Airline Competition Preservation Act of 2001, it would kick in if two of the largest seven major airlines merge or if one of those airlines buys most of the assets of another. If either occurs, then the DOT could order airlines to lower fares in markets where three or fewer carriers control more than 70 percent of the scheduled revenue passenger miles. It also could force airlines with high fares to give gates at their hubs to competitors. The legislation is identical to HR 152, which Rep. James Oberstar, D-Minn., introduced Jan. 3. Rep. John Sweeney, R-N.Y., introduced a narrower version that same day that would let DOT punish carriers that seek to bankrupt new entrants. Railroads are not exempt from the re-regulation bug. HR 141 would declare that competition is the goal of U.S. rail policy and would let shippers challenge rate levels. The bill comes in response to complaints that a wave of mergers has eliminated competition on many rail routes. For agriculture, several lawmakers have promised to re-introduce bills from the 106th Congress. Yet so far, only one bill is pending. Senate Minority Leader Tom Daschle, D-S.D., has introduced a so-called placeholder bill, S-20, to deal with agribusiness mergers. The measure is expected to give the Department of Agriculture a say in agribusiness mergers. Under S-16, a broad anticrime measure, big corporations that restrain trade or attempt to monopolize markets could be hit with penalties of up to $100 million, a 10-fold increase from the current maximum. On the securities front, Senate Banking Committee Chairman Phil Gramm, R-Texas, and Sen. Charles Schumer, D-N.Y., introduced Jan. 22 the Competitive Market Supervision Act of 2001. Known as S-142, the bill would cut by more than half the fees paid to register securities and IPOs. Companies would pay $67 for every $1 million in registered securities. That would drop to $33 in fiscal year 2007. It also would let the Securities and Exchange Commission raise employee salaries. HR 11 would govern what happens when the holder of a derivative contract or similar type of security goes bankrupt. The intent is to prevent the failure of one party to the contract from causing a cascade of failures among other holders. It was introduced Jan. 3 by Rep. Jim Leach, R-Iowa. Don’t interfere with Deutsche Telekom AG’s acquisition of VoiceStream Wireless Corp. That’s the message from the European Union, which notified the State Department last week that it was prepared to file a World Trade Organization complaint if the U.S. rejects the deal. The Federal Communications Commission has been studying the acquisition for six months. The deal has come under fire from Sen. Ernest Hollings, D-S.C., who tried to attach a rider to the appropriations bills at the end of last year to bar any state-controlled foreign firm from buying U.S. telecom assets. The German government owns just less than half of DT. A European Union regulatory review into last year’s failed $20 billion music joint venture between EMI Group PLC and Time Warner Inc.’s Warner Music Group has turned up some interesting documents. The European Commission revealed last week that its study of the EMI-Warner tie-up shows possible collusion to fix prices for music CDs in Europe. The agency has launched an inquiry by sending letters requesting further information from the five majors — EMI, Warner Music, Bertelsmann Music Group, Sony Music and Seagram’s Universal Music Group — and from five online and 13 traditional retailers. EMI and Warner abandoned their venture in October to avoid an EU regulatory veto. The Commission was set to block the deal after concluding that it would strengthen the market oligopoly by reducing the number of players from five to four. And as past price-fixing cases have shown, the phenomenon is often encouraged when an oligopoly is present. A similar investigation in the U.S. resulted in an agreement in May between the Federal Trade Commission and the five majors to stop setting minimum prices. The investigation will not only punish EMI but also may dampen prospects for consolidation in a highly concentrated market. Applause and appreciation for the new London-based International Accounting Standards Board, commissioned to establish a single set of global accounting rules, came swiftly from the Securities and Exchange Commission last week. Two members of the U.S.’s Financial Accounting Standards Board — FASB Vice Chairman James Leisenring and board member Anthony Cope — will be among the first to serve on the board. Also on the 14-member panel are Americans Mary E. Barth, professor of accounting at the Stanford Graduate School of Business, and Robert H. Herz, a partner with PricewaterhouseCoopers. “The board members who have been appointed … carry an enormous public service responsibility,” said SEC Chairman Arthur Levitt, who headed the nominating committee. “Strong and resilient capital markets cannot function without high-quality information.” Lynn Turner, the SEC’s chief accountant, said the creation of IASB will likely be one of the most significant events in accounting and financial reporting this year. “Investors continue to need transparency, and not through some kaleidoscope,” Turner said last week at a conference in Coronado, Calif. Along with the FASB, the IASB has created a “two-horse race” to improve accounting standards. Companies have long complained that they have to recast their financial statements to suit national rules. The IASB is supposed to correct that by writing rules that apply across borders. But every new rule the board writes will have to be adopted by national regulators. Having two FASB members on its board increases chances that IASB standards will make it into U.S. accounting codes. Charles Sisk and Victorya Hong contributed to this report. Copyright �2001 TDD, LLC. All rights reserved.

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