Making the Right Call on AT&T and T-Mobile

Diane Katz / March 22, 2011

No sooner did AT&T announce on Sunday its proposed acquisition of T-Mobile than analysts began handicapping whether federal regulators will approve the deal.

The $39 billion fusion of the second- and fourth-largest providers of U.S wireless service (by revenue) is sure to trigger lots of hand-wringing at the Federal Communications Commission (FCC). But the agency’s penchant for regulatory excess has harmed consumers in the past, and Congress ought to constrain it from doing so in this case.

Under current law, the commission must approve all transfers of radio spectrum licenses and telecommunications operating certificates. Consequently, it does have a regulatory role in mergers and acquisitions. But commissioners and their staffs have routinely abused their regulatory discretion by exploiting license reviews to promote pet causes. And while license transfers are rarely rejected outright, the FCC frequently imposes onerous conditions, including divestiture, service restrictions, and mandates. (more…)