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FCC Follies



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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.



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