TechFreedom Statement on AT&T/T-Mobile Merger Collapse

by on December 19, 2011 · 12 comments

Today, AT&T announced they had abandoned their planned acquisition of T-Mobile after the DOJ sued to block the deal and the FCC published a report sharply critical of the deal. The following statement can be attributed to TechFreedom Fellows Larry Downes, Geoffrey Manne and Berin Szoka:

Nearly two years ago, the Obama FCC declared a spectrum crisis. But Congress has refused to authorize the agency to reallocate underused spectrum from television broadcasters and government agencies—which would take years anyway.

The AT&T/T-Mobile merger would have eased this crisis and accelerated the deployment of next-generation 4G networks. The government killed the deal based on formalistic and outdated measures of market concentration—even though the FCC’s own data show dynamic competition, falling prices, and new entry. The disconnect is jarring.

Those celebrating the deal’s collapse will wake up to a sober reality: There is no Plan B for more spectrum. All the hand-wringing about “preserving” competition has only denied consumers a strong 4G LTE competitor to compete with Verizon—and slammed the brakes on continued growth of the mobile marketplace.

Unfortunately, this is just part of a broader pattern of regulators attempting to engineer technology markets they don’t understand. The letter sent today by the Senate Antitrust Subcommittee urging the Department of Justice to investigate Google’s business practices relies on similar contortions of market definition to conclude that the search market is not competitive. In both cases, regulators are applying 1960s economics to 21st century markets.

Ultimately, it’s consumers who will lose from such central planning.

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