Posts Tagged ‘AT&T’
June 13th, 2018 at 3:59 pm
Let the AT&T/Time Warner Ruling Be a Lesson Against Needless Federal Market Interference
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Hopefully this will serve as a deterrent lesson to the U.S. Department of Justice, and the federal government more generally.

Yesterday, Federal Judge Richard Leon delivered his decision rejecting the Justice Department’s misguided lawsuit to prevent AT&T and Time Warner from merging.  The government had no business even bringing the suit, as the merger poses no threat of consumer harm.  To the contrary, as noted in today’s Wall Street Journal by Michael D. Smith and Rahul Telang, it promises more choices and greater market competition for American consumers.  Because the merger was “vertical” in nature, rather than a “horizontal” merger of direct market competitors, federal bureaucrats would only inflict harm by delaying or denying its fruition:

[T]he unique characteristics of digital markets have allowed a small number of internet giants – among them Amazon, Google, Netflix and Facebook – to dominate their industries and forestall entry by competitors.  These companies have put serious money into customer connections, data analytics and back-end systems, and these investments scale very well.  Netflix has penetrated more than half of U.S households.  Google and Facebook control almost three-quarters of online advertising.  Amazon does nearly half of all online retail sales.  These are astonishing numbers.

Now that these tech giants have established their downstream power in the distribution business, they are beginning to amass upstream power by getting into the content-creation business…  Given the dominance of Silicon Valley’s internet giants, it makes no sense to prevent AT&T and Time Warner from merging.  These companies aren’t trying to join forces because they want to take control of a dying industry;  they want to be allowed to compete in a new one.”

The American economy has accelerated since President Trump’s election as a consequence of his deregulatory and tax-cutting agenda, and that same logic should apply to the realm of market mergers between mutually bargaining parties.

As one example, Comcast recently announced a bid for certain assets of 21st Century Fox.  In the same way as described above regarding the AT&T/Time Warner merger, Comcast’s acquisition would greatly benefit consumers.  The film and television businesses have never been more competitive, dynamic or creatively rich, and consumers possess more entertainment choices than ever before.  Free markets work, and federal bureaucrats have zero business interfering in this matter.

As Judge Leon noted in his decision, federal government decisions to interfere come at great cost:

The government has had this merger on hold now since October of 2016 when it launched its investigation.  In that 18-plus month period, the companies have twice extended the break-up date to accommodate the government’s litigation of this case.  During that same period, the video programming and distribution industry has continued to evolve at a breakneck pace.  The cost to the defendants and the government to investigate, litigate and try this case has undoubtedly been staggering – easily in the tens of millions of dollars.”

That same logic applies to Comcast’s proposed acquisition.  Let’s not be forced to repeat yesterday’s harsh lesson to the Justice Department, after needless waste of time and taxpayer resources in meritless litigation that only serves to harm American consumers and competitive marketplaces.

June 11th, 2012 at 1:59 pm
Coalition to FCC: Approve Verizon/SpectrumCo Deal Now

In a letter delivered on Friday, a coalition of 14 free market organizations, including the Center for Individual Freedom (“CFIF”), urged the Federal Communications Commission (“FCC”) to approve a private deal between Verizon and cable companies that will free currently unused spectrum to help alleviate the growing “spectrum crunch” that many wireless consumers – particularly those in densely populated areas of the country – are already feeling.

The letter, which was organized by ATR’s Digital Liberty, reads in part:

Demand for wireless broadband is more than doubling annually, but vast swaths of valuable spectrum – the lifeblood of mobile communications – remain unavailable to wireless carriers. Consumers in densely populated urban areas are already suffering from inadequate wireless capacity. While meeting this robust demand will require wireless carriers to adopt an ‘all-of-the-above’ approach, increasing spectrum availability is unquestionably the most fundamental and cost-effective means to meet wireless demand.

Unfortunately, spectrum auctions that will enable wireless carriers to bid on additional spectrum remain years away. Verizon Wireless’s proposed transfer presents a rare and crucial opportunity to deploy currently unused spectrum for wireless broadband. The spectrum at issue is ideally situated in the 1700/2100 MHz AWS bands, covering over 80 percent of the U.S. population (259 million POPs). Consumers will see substantial net benefits from expanded coverage enabled by additional spectrum, especially compared to more costly and time-consuming undertakings such as cell splitting.

With demand for wireless broadband more than doubling annually, the FCC’s own estimates predict that demand for wireless spectrum will exceed supply in 2013.  Yet Obama’s FCC has done little if anything at all to make additional and much-needed spectrum available to wireless network operators. 

In fact, under the Obama Administration the FCC has worked to delay and outright block private-sector deals to alleviate the growing spectrum crunch.  Last year, the FCC took unprecedented steps to block the then-pending AT&T-T-Mobile merger, going so far as to publicly release a biased draft staff report in opposition to the merger that the commissioners themselves never approved and quite  possibly didn’t even read.  Had that merger been approved, AT&T was promising to deploy high-speed mobile broadband to 95 percent of all Americans.  And the FCC has been over-scrutinizing and slow-walking approval of the Verizon-SpectrumCo deal since December.

Read the full coalition letter to the FCC here.

December 1st, 2011 at 5:48 pm
FCC Malfeasance on AT&T/T-Mobile Merger Threatens American Jobs, Breaks with Established Protocol
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So federal bureaucrats at the Federal Communications Commission (FCC), those known master micromanagers of the American economy, concluded in their wisdom to oppose the proposed merger between AT&T and T-Mobile, two independent, free, private parties.  Along the way, the FCC went to the improper and unprecedented extreme of releasing a staff report gratuitously and inaccurately critiquing the justifications offered for the merger.  Again, we’re talking about a merger between two consenting, informed parties.  We’re also talking about a merger application that was voluntarily withdrawn by the parties.  Yet the FCC, for reasons still unexplained, broke with decades of administrative protocol and published the staff report.

Remember, this is the same supposedly omnipotent federal government that managed the housing market so well in recent decades through Fannie Mae and Freddie Mac, not to mention the splendid business acumen it displayed in the energy sector with such examples as Solyndra.  And it’s the same FCC that incompetently attempted to commandeer Internet service through so-called “Net Neutrality,” which earned it a unanimous rebuke from the D.C. Court of Appeals and Congress.

Turning its eye toward the telecommunications industry, the FCC decided in its considered expertise that the AT&T/T-Mobile merger was not in the best interests of the American people.  As one particularly curious example, the FCC staff report claims that the proposed merger would cause job losses.  One would think that federal regulators would be more circumspect in asserting job projections in light of the slow-motion “stimulus” disaster that was supposed to cap unemployment at 8% in October 2009.  Instead, unemployment stands at 9% and has exceeded 8% for a record number of months.  Moreover, if the merger was a likely job-killer, why would even the Communication Workers of America (CWA) labor union support it?  The FCC asks us to believe that the labor union most impacted by the proposed merger would somehow seek fewer dues-paying members?

Moreover, the FCC itself within the past month claimed that its own $4.5 billion fund to deploy wireline broadband to just 7 million Americans would create “500,000 jobs and $50 billion in economic growth.”  Yet it now contradicts itself by claiming the proposed AT&T/T-Mobile merger, which would deploy broadband service to the far greater number of 55 million Americans, would somehow destroy jobs?  In other words, the FCC seems to think that smaller amounts of government spending to bring broadband to a smaller number of people will create jobs, but much larger amounts of private investment to bring broadband to a much greater number of people will not.

Federal bureaucrats are unequipped to micromanage the telecom industry, just as they’re incompetent to tell Boeing (America’s top exporter) where it can and cannot operate manufacturing plants.  It’s yet another example that the FCC is out of control, and threatening American jobs by its malfeasance.

August 31st, 2011 at 4:51 pm
Obama Administration Sues to Block AT&T/T-Mobile Merger: Killing Jobs By Suing Those Who Create Them
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This defines cognitive dissonance.  The Obama Administration continues to scratch its collective head, wondering why its record deficit spending “stimulus” and big government onslaught has failed to create jobs.  Meanwhile, its own Department of Justice sues an iconic American company that creates them.

Just today, AT&T announced that it is relocating thousands of jobs from overseas back to American shores.  But also today, the Obama Department of Justice – you know, the one ultimately behind the disastrous “Operation Fast and Furious” – sued to block the proposed private merger between AT&T and T-Mobile.  Ponder that irony for a moment.  The Obama Administration, which has done so much to interfere with job creation since the recession officially ended all the way back in June 2009, is suing an employer that at this very moment is orchestrating the return of thousands of jobs to the United States.

Perhaps we shouldn’t find this surprising.  After all, the Obama Administration is also in the process of persecuting Boeing, America’s largest exporter, simply for electing to locate a manufacturing plant in South Carolina.  But that doesn’t make its behavior any less despicable or destructive.  If Obama truly wants to prove to the electorate that he seeks economic recovery, he must reverse this policy course within his administration.  Immediately.

March 31st, 2010 at 3:32 pm
Who Are Henry Waxman and Bart Stupak to Be Lecturing CEOs?
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Within days of ObamaCare’s passage, AT&T, Caterpillar and other American employers announced hundreds of millions of dollars in earnings writedowns pursuant to U.S. accounting laws.  Although Democrats falsely claim that these restatements are mere political attacks aimed at Barack Obama, the simple fact is that they are legally required to report the corporate costs of ObamaCare’s tax increase on the retiree drug benefits that they pay each year. Specifically, the Financial Standard Accounting Board’s 1990 Statement Number 106 mandates earnings restatements due to anticipated future retiree liabilities.  If these employers did not report the writedowns, they’d be prosecuted.

The most despicable reaction of all, however, may be that of two Congressmen who played a critical role in imposing ObamaCare in the first place.  Henry Waxman (D – California) and Bart Stupak (D – Michigan), those two profiles in cowardice and malevolence, have now demanded the CEOs of AT&T, John Deere, Caterpillar and Prudential appear to justify themselves before their committee.   According to their letter, “the new law is designed to expand coverage and bring down costs, so your assertions are a matter of concern.”

In other words, who are you going to believe – Henry Waxman, Bart Stupak, Barack Obama and their doctored Congressional Budget Office predictions, or your own actual bottom line and real-world numbers? Every person with a grain of sense anticipated the negative consequences of ObamaCare, but such effects seem to have blindsided ObamaCare’s advocates.

More generally, who are Henry Waxman and Bart Stupak to be hauling the CEOs of some of America’s most valuable and successful companies to Capitol Hill to explain themselves?  Shouldn’t it be the other way around?  How many jobs have Waxman and Stupak created in their lives compared to AT&T, Caterpillar, John Deere and others?  How many successful products have Waxman and Stupak contributed to the world economy and human progress?  Why aren’t the CEOs the ones hauling Waxman and Stupak to explain their retrograde economic views and the destruction that they are wreaking on America, rather than vice-versa?  Why aren’t Waxman and Stupak explaining their toxic behavior to a nationwide audience?

We live in an increasingly Orwellian era, and the sheer weight of absurdity may soon cause a snap.