Bell-South-AT&T: Regulation Via the Back Door?

by on October 25, 2006 · 4 comments

After a year of debate, neutrality regulation proponents have singularly failed ( notwithstanding) to get Congress to enact their proposals. This of course could change, especially if there’s a change in the control of Congress. But, should this front-door approach fail, it now seems proponents have a plan B: sneak regulation in as a condition of AT&T’s merger with Bell South.

The “It’s Our Net Coalition” asked the FCC to do just that in a petition filed with the agency yesterday. Specifically, the group asks the Commission to impose the net neutrality rules contained in the amendment by Senators Snowe and Dorgan now pending in the Senate.

This legislation has been the subject of, to put it mildly, considerable controversy. It hasn’t been voted on–in this Congress it would likely fail if it were. And similar proposals were repeatedly defeated in the House. But the “It’s Our Net Coalition” would save us all the inconveniences of this congressional debate, and simply have the FCC impose the Snowe-Dorgan rules (at least as to AT&T) on its own, without even the bother of a separate rulemaking proceeding.

The idea of imposing conditions on mergers isn’t new–or by itself controversial. But such conditions should be aimed at alleviating a reduction in competition caused by a merger. The Department of Justice, however, has already found that the merger is not likely to substantially reduce competition in any market. BellSouth and AT&T’s businesses simply don’t overlap much.

Strangely, the Coalition, in it’s eight-page petition devotes only a single paragraph to the merger’s effect on competition. broadly asserting that the merger would solidify the market power of broadband firms. Most of the petition is instead devoted to rehashing general arguments for neutrality regulation.

Former FCC Commissioner Harold Furchtgott-Roth often complained about the FCC merger reviews, and the conditions imposed on approvals, called the process “lawless, standardless, and endless.” He was right. Mergers should be approved or rejected based on their specific effect on competition. The process should not be used to impose regulation through the back door.

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