AT&T and T-Mobile: The Anti-Antitrust Terrorists

by on March 21, 2011 · 1 comment

In the rush of ink that flowed yesterday over AT&T’s announced merger with T-Mobile USA, I posted a long piece on CNET calling for calm, reasoned analysis of the deal by regulators, chiefly the Department of Justice and the FCC.

Since the details of the deal have yet to be fleshed out, it’s hard to say much about the specifics of how customers will be affected in the short or long term. My CNET colleague Maggie Reardon, however, does an excellent job laying out both the technical and likely regulatory issues in a piece posted today from the CTIA conference.

My point was simpler. Within hours of the deal’s announcement, and without any relevant facts, public interest groups including the Media Access Project, Public Knowledge and Free Press had already issued press releases condemning it–Public Knowledge, in fact, called the merger “unthinkable.”

That, I’m sure, was just rhetorical excess, but it does underscore a modern tendency among some advocates to react emotionally rather than rationally to any kind of asset combination. They assume any change in the competitive landscape that reduces competition in the literal sense (fewer competitors) is by definition an antitrust violation, and conflate that with what is in fact much more complex antitrust analysis that regulators undertake.  No need to think about it–it’s just evil.  (Please re-read Adam Thierer’s paper on merger terror, “A Brief History of Media Merger Hysteria.”)

What will be significant in this deal, I suspect, is who takes the lead. The Department of Justice has repeatedly indicated it believes there is robust competition in mobile services, and that an accelerated push to 4G (the point of this merger) could improve competition overall by creating a viable alternative to wireline broadband.

(See the DoJ’s letter to the FCC as part of the National Broadband Plan–which also, by the way, found robust competition in wireless, though the FCC has since back-tracked in an unconvincing manner.)

The FCC, on the other hand, has gone off the rails recently in its antitrust analyses, as evidenced by the painful, drawn-out review of Comcast’s takeover of NBC Universal and the crazy quilt of largely-unrelated conditions imposed on the deal in a nearly 300-page Order.

Worse, there’s still that nagging Paragraph 78 of the Open Internet order, where a majority of Commissioners explicitly rejected the idea that traditional antitrust measures of harm to consumers would guide their application of the net neutrality rules. (They offered no alternative criteria, even worse.)

Left to the FCC, the AT&T/T-Mobile deal will take forever to complete, and will be left shouldering regulatory pet projects for years. Left to the Department of Justice, something more reasonable and timely might happen.

But that’s just more thinking about the “unthinkable.” Pardon my logic.

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