AT&T: Don’t Regulate Me, Regulate My Competitors

by on November 19, 2007 · 4 comments

Chairman Kevin Martin’s attempt to assert broad – and virtually unlimited — powers over cable television has sparked a real imbroglio over at the FCC. The key question: has the cable industry reached the magic 70 percent penetration rate required to trigger new regulatory powers? Martin says yes, apparently using numbers from Warren Communications (the owner of Communications Daily). Warren Communications itself, however, has said its data shows no such thing. Fellow GOP commissioners Robert McDowell and Deborah Tate – apparently feeling a bit betrayed by Martin — on Thursday took the unusual step of writing directly to Warren Publishing for “any and all information” regarding the data.

Warren hasn’t responded yet, but that hasn’t stopped a handful of regulation supporters from weighing in in defense of the FCC’s attempted power grab. Among them: Free Press, the Media Access Project, Consumers Union, the Consumer Federation of America, AT&T…

Whoa! What’s AT&T doing in this motley group?

AT&T, after all, has spent the past several years fighting against the pro-regulatory agenda of just these groups, arguing that the marketplace, not FCC bureaucrats, should govern telecommunications. But there it was, arguing to the FCC last week that –yes – the cable industry has reached the 70 percent level (and therefore regulation can be authorized.)

A reversal of policy for AT&T? No – in fact AT&T has taken the same position on this issue since it was called SBC. The difference seems to be more elemental: the other battles involve regulation of AT&T’s activities, while this one concerns AT&T’s competitors.

AT&T’s lobbyists – like those of many other companies – would defend such seeming inconsistency. Their job, they argue, is to advance the interests of their firm, not to advocate abstract free-market principles. True enough – and that’s why so many on the left are off-base when they assume that being pro-market and being pro-big business are the same thing.

But AT&T’s “practical politics” approach may not in fact even be in the best interests of AT&T. Simply put, planting regulatory weeds in your neighbors back yard makes it rather more likely that they will grow in your yard too. Ideas matter – as does credibility. Lobbyists that enthusiastically talk up the benefits of regulation for their competitors may not find themselves taken seriously when they describe the problems that will occur when it is imposed on themselves.

Some firms know this. Verizon, for instance, typically avoids “regulate thy neighbor” tactics. In the present controversy, it has for the most part has argued simply that competition is the answer.

That approach is not only more consistent and more effective, but also – not coincidentally — right.

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