Government Actions to Stop AT&T, T-Mobile Merger Will Fuel GOP Candidates

Carl Weinschenk

The candidates for the Republican nomination for president have had, at last count, about 4,000 debates. One topic that apparently hasn't come up yet is the proposed merger of AT&T and T-Mobile.

 

That could change. The move by the Federal Communications Commission - which, after all, is headed by an old buddy of President Obama - is said to be close to inserting itself in the middle of the deal in a way that makes it far less likely that it will close. That is in addition to the Department of Justice suit against the deal.

This week, many sites report that the FCC intends to refer the merger to an administrative law judge. AT&T will be required to show that the deal is in the public's interest. Clearly, that's something the FCC doesn't think can be proven, because it doesn't think it is the case. This is how GigaOm puts it:

The FCC has found plenty to criticize in AT&T's proposal, refuting Ma Bell's claims about the supposed benefits of the merger from all sides in a press conference held Tuesday. FCC lawyers found the merger would kill jobs, rather than create them, that the sum of the two operators' 4G wouldn't be greater than the parts, and that a merged AT&T-Mo would likely stifle wireless competition in 99 of the 100 largest markets-basically every major city but Omaha, Neb.

It is not certain that the move will be made. Wired points out that the draft that is circulating can be squelched, amended or approved. If it is issued as written now, it will be interesting to see how this plays out as the presidential race starts to gather momentum. The reaction is likely to sound like this:

Larry Solomon, senior vice president of Corporate Communications, told Mashable, "The FCC's action today is disappointing. It is yet another example of a government agency acting to prevent billions in new investment and the creation of many thousands of new jobs at a time when the US economy desperately needs both. At this time, we are reviewing all options."

The FCC working to scuttle a deal is red meat for advocates of small government. The deal was conceived in the marketplace and, according to this line of thinking, should be off limits to limitations imposed from a bunch of lawyers and bureaucrats in Washington.

 

In addition to not accepting the basic right of the government to interfere, the specific conclusions of the FCC lawyers will no doubt be questioned. It also will be pointed out that the FCC is battling the incumbent phone companies on Net Neutrality and the all-important details on the way in which broadband access is provided to rural citizens. Its moves should be seen, critics will say, as one chess move in that bigger mosaic.


None of this is reason for the FCC to hold off, if the thought truly is that cell phone users will be worse off if the deal goes through. The bottom line is that if the draft order is approved and issued, the subject will get a lot of play from the candidates simply because it is a stark and accessible juxtaposition of the very different ways in which Democrats and Republicans approach business and telecommunications.



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