When AT&T and T-Mobile requested to withdraw their application for FCC review of their proposed merger, preferring to concentrate for now on winning the unfair suit brought against them by the Justice Department, the initial response from progressives was furious. They demanded instead that the FCC dismiss the application with prejudice, effectively killing the merger despite the plain language of the commission’s own rules. And they further demanded that the FCC release its “staff report” on the merger, rumored to be highly negative thanks to the input of those same anti-merger groups.
Unfortunately, both of these things are against the rules and precedent. One might think that would be the end of the story, but no. Yesterday, the commission agreed to follow its own rules and dismiss the application without prejudice. However, it disgraced itself, landed a punch on AT&T, and pleased the Left by releasing the staff report. Notice that a staff report by definition does not reflect the judgment or even the consideration of the commission. The FCC action is unprecedented given that the applicants had won approval to withdraw their application without prejudice earlier that day from the full commission.
This is not how government is supposed to work, yet we see more and more examples of this overbearing regulation every day. The consequences are tragic, not just for companies who need government approval for business transactions, but for everyone. Without new large-scale private-sector investments, there will be few if any new jobs in the United States. When parties seeking government approval are convinced that the deck is stacked against them, that they can’t even count on the procedural protections and due process in an agency’s own rules, potential investors start to become seriously worried. Yet the administration keeps sending signals to potential investors that America isn’t really open for business — it’s open only on their terms.
On November 18, the FCC trumpeted its analysis that the adoption of universal high-speed broadband would add 500,000 jobs. But less than two weeks later, they’re trying to stop AT&T from investing $8 billion to deploy high-speed mobile broadband as part of the merger and create up to 96,000 new jobs.
I understand that there are those who worry about impaired competition, harm to consumers, and lost jobs. Unfortunately, there is zero evidence of the first two — and if it appeared, remedies would be in order — and real evidence against the latter. The Communications Workers of America union (which should be the most worried about job losses) is actually a strong supporter of the merger precisely because it knows the transaction will add tens of thousands of new jobs in the critical telecom sector as well as in the wider economy. Even FCC chairman Julius Genachowski said in September that “the key fact is that the Internet is creating more jobs than it is eliminating. McKinsey [a consulting firm] recently concluded that broadband Internet creates 2.6 new jobs for every one lost.” Somehow, though, this doesn’t apply to AT&T.
It’s entirely consistent with the administration’s “jobs are created by government” bias that the FCC’s broadband policies and initiatives will create hundreds of thousands of jobs nationwide over the next several years, but the new investment that comes with the AT&T/T-Mobile merger will result in massive job losses.
This week’s measures might please some ideological purists within the president’s party, but they won’t create new employment opportunities for America’s workforce and nor will they translate into broader economic growth in communities across our country. These are two things President Obama so desperately needs for his reelection bid, so it is time for self-interested politics to support good policy.
I thought AT&T was the #1 largest corporate donor to political campaigns (and like most huge companies, they spread their pig-grease about equally among both political parties.)
Yet even with their reputation for cronyism (Solyndra!), Obama's team is hamstringing this -- or rather, a bunch of egghead apparatchiks he appointed are hamstringing everybody?
Isn't this just more of Obama's "unicorn & rainbow management" style? (Talk huge, act petty, deliver nothing!)
Reply to this commentLinkReport AbuseObama's unicorn & rainbow management style: "Talk huge, act pretty, deliver nothing!" ;-D
Obama's team will hamstring anyone who poses a threat or who simlpy doesn't agree with their agenda... mafioso type tactics.
Reply to this commentLinkReport AbuseI'm surprised at your surprise that a group who is at it's heart relativistic in nature would ever care to follow rules or laws that will not promote their agenda. The GOP is the party of dumb because they continue to live under the fantasy that the Left is just their honorable opponent that seeks the best for all Americans just in a different way than they do.
Reply to this commentLinkReport AbuseFor the Left perception is reality. As long as they perceive that mergers of any type will result in less competition (having to hang their hats on GSM as opposed to CDMA, which most of the country operates for wireless connections) and higher rates (even though prices in wireless are generally high and people pay willingly) then the Left will be against it. Now, ask them why they are supporters of socialized medicine and they'll say they're two completely different things. I agree: having the government control industry is worse than two corporations being able to merge to achieve savings for regulatory creep.
Reply to this commentLinkReport AbuseThis is pure Chamber of Commerce shilling. By definition, if a market with three strong (and one weak) competitors is reduced to two there is potential for anti-competitive pricing. T-mobile has been providing excellent service to consumers for many years with considerable innovation and does not need to be absorbed into an ATT/Verizon duopoly, both of which companies are highly consumer-unfriendly.
The fact that the union favors the merger should show you no good will come of it. This is one of the US's most important sectors, in which ATT/Verizon had left it lamentably trailing leaders like South Korea. It needs opening up, not closing down.
Conservatives are in favor of free markets, not crony capitalism.
Reply to this commentLinkReport Abuse"Conservatives are in favor of free market"
And the only way we can have a "free" market is for the government to be strongly involved in every aspect of the business and to manage every business deal in the market. Only with heavy government involvement at every step can it be "free". I guess...
We may have to redefine "free market" for your comment there; I'm not sure I see how this works otherwise.
Yes, block the forming of a monopoly. Blocking illegal activities is a reasonable action of the government; but blocking every merger where future illegal activity might occur? We're stopping possible future crimes, and this is appropriate use of government resources?
Can you be punished for possible future criminal activity as well? Or is the psychic future crime division only applying it's efforts to the "free market" right now?
Conservatives are in favor of controlling the market, obstructing business choices, and blocking legal activity by corporations when they think the government needs to be involved even if no illegal activity is occurring now? ... and we're calling this support of the "free market" still?
You do know "free market" refers to the market being free to act; not to YOU being "free" to control it at a whim to prevent perfectly legal activities, don't you?
I'm not sure I get why the Government should be involved here; so long as the merger itself doesn't violate the law... what's the problem again?
Reply to this commentLinkReport AbuseIf the FCC Commissioners broke their own rules, can't they be prosecuted? I realize Holder isn't going to do it, but could an NGO apply to the court to prosecute them as a sort of in loco parentis of the Holder Justice Dept?
Reply to this commentLinkReport AbuseI'm a Conservative and supported the merger, but the truth needs to be told about the CWA's support of the merger.
Whether or not the merger creates job is something honest people can disagree on. But what is absolutely beyond dispute is that AT&T Wireless is a union shop, whereas T-Mobile is not. The ONLY reason CWA supported this merger is because AT&T Management sold out T-Mobile non-union employees by agreeing to unionize them in order to buy CWA's support.
I thought (and still do) that the merger would be good for the industry, but I found AT&T's collusion with CWA in this regard to be shameful.
Reply to this commentLinkReport AbuseSo, is the author on retainer from AT&T or T-Mobile or both?
Reply to this commentLinkReport Abuse"I understand that there are those who worry about impaired competition, harm to consumers, and lost jobs. Unfortunately, there is zero evidence of the first two..."
Hello, hard-right conservative here with a sincere question: how could there be any evidence of the first two until after the merger has gone through and it's too late to do anything about it? If there's some tool for this I'm just not aware of, I would love to be informed.
Conservatives stand for free markets, which are *hampered*, not fulfilled, by monopolies -- and that means we're supposed to take the axe to the nation's largest corporations, for the good of the market. (And it's tough to find a real victim in a corporate breakup.) I like to remind my fellow cons that it was we Republicans who invented the Sherman Anti-Trust Act. I think we forget that sometimes.
Reply to this commentLinkReport AbuseSo T-Mobile and AT&T are the only providers and their merger would create a monopoly?
Or we should not just prevent monopolies; but any merger that might, at some future point create a position where a monopoly might form (any merger) or any merger that might reduce competition (again any merger)?
Is your opinion of the "Conservative position" we should ban all mergers? And in fact force a company to split once it reaches a certain size; and otherwise try to force the market to smaller less efficient and more costly options when possible?
I'm a libertarian, and I don't see a good need for the government to be this directly involved. Prevent illegal action (monopoly) fine; but prevent action that might do something that could someday lead to illegal action?
That seems like the government trying to run the market itself; which I don't think has a good track record.
Reply to this commentLinkReport AbuseI'm skeptical of the merger skepticism. But I was hoping for a more informative critique of the opposition arguments, even granting that Holtz-Eakins' focus was on the alleged self-disgrace of the FCC by its two actions.
"I understand that there are those who worry about impaired competition, harm to consumers, and lost jobs. Unfortunately, there is zero evidence of the first two — and if it appeared, remedies would be in order — and real evidence against the latter."
What would be, to me, more helpful, and useful, and interesting is a more detailed elaboration on this.
Reply to this commentLinkReport AbuseI am at a loss to understand why releasing the staff report is so bad.
From my perspective, all it does is give another viewpoint on the proposed merger. I am not outraged.
I am glad the FCC let ATT withdraw the application without prejudice. If ATT is right on this one, they should be given a chance to prove it and/or make the government make its case.
I am against the merger because, although the larger the company, the larger the economic efficiency, I believe that the benefits of the efficiencies go to the company, not to the population at large (although many people do own ATT stock).
One last thing. Screeds like Mr. Holt-Eakin reflect badly on NR (IMHO).
Reply to this commentLinkReport Abusemore evidence that the right has become the party of big business. there is a reason why there are antitrust laws. its because market power usually hurts competition. the right is supposed to be in favor of competition, but its really just in favor of big business.
Reply to this commentLinkReport AbuseThe merger will harm consumers. T Mobile is the least expensive of the 4 primary cell phone providers. ATT has said PUBLICALLY they expect to improve their bottom line with this merger by requiring T Mobiles current customers (who are less likely to have expensive data plans) to purchase the ATT data plans.
How does that increase competition? How does that provide more choice to the consumer? How does that NOT harm consumers?
Reply to this commentLinkReport AbuseI also fail to understand how it would be better for customers to take the only two national GSM providers and let them merge. Whatever choice there is right would be gone after the merger.
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