AT&T's proposed acquisition of competitor T-Mobile would leave the U.S. wireless market with only two major players-Verizon, which would be bumped from top dog to second fiddle, being the other-and would have serious effects on American consumers, American jobs and the dispersal of American dollars, according to a member of the Federal Communications Commission.
As such, members of the FCC will need to ask themselves some serious questions about "what residue of competition" would be left, should the merger be approved, Commissioner Michael Copps said during an interview on C-SPAN's "The Communicators," program, available online and scheduled to air April 2.
Copps said the deal, which is expected to take more than a year to get through the regulatory process, would require an even "steeper climb" for him to approve than did the merger between Comcast and NBC Universal-a deal Copps ultimately voted against.
The AT&T deal, he said, would also give "a lot of power, a lot of influence," to one company in a market where two companies would control nearly 80 percent of the nation's wireless spectrum. Before approving such a deal, Copps said it would be important to understand what impact it would have on American jobs. Additionally, were AT&T to pay T-Mobile parent company Deutsche Telekom $39 billion, there's a question of how much money would be sent overseas to support telecommunications abroad, instead of in the United States.
However, the issue he finds most problematic is that the deal "kind of sucks the oxygen out of so many issues that are pending before the Federal Communications Commission," Copps said. "This affects so much of what we're doing. Whether this goes forward or not has an effect on the issue of spectrum auctions. It has an effect on public safety. The list goes on and on."
After 10 years at the FCC, he said, the organization sometimes feels more like, "the Federal Merger Commission," with companies continually coming before the agency for approval and insisting that it'll be the last time.
"But as soon as you approve one," Copps said, "then somebody else is through the door saying, 'Hey, you let the other guy get real big, so you have to let us, too, or else it's not fair.'"
U.S. carrier Sprint has said it plans to fight the AT&T acquisition. Sprint currently is the nation's third-largest carrier and considered a major player in the market, and the deal would enlarge AT&T to the point of dwarfing Sprint. It would also hurt competition and consumers, Sprint argued in a March 28 press statement, as well as undo earlier federal rulings.
"The transaction ... would reverse nearly three decades of actions by the U.S. government and the courts that modernized and opened U.S. communications markets to competition," Sprint argued in the statement. "The wireless industry has sparked unprecedented levels of competition, innovation, job creation and investment for the American economy, all of which could be undone by this transaction."
Sprint added that the result of the deal would be a "duopoly" between AT&T and Verizon.
A recent editorial in The New York Times suggested the same, adding that in order for the acquisition to be deemed in the public interest, it would need to improve competition, which could be accomplished by regulators forcing AT&T to divest portions of the T-Mobile spectrum to other carriers, allowing the subscribers of other carriers to roam on its network and providing customers with non-discriminatory access to data from third parties.
"I think there's a lot of merit in there," Copps said, responding to the editorial, though he added that there's also a question of whether it's worth spending so much time trying to make "what some people would deem unpalatable, minimally acceptable."
Rhetorically, he wondered, "Is that the kind of telecommunications market we ought to be working for? Is that the best we can do for competition? Is that the best we can do for consumers? Is that the best we can do for jobs?"
AT&T, if it is to have these questions answered in the affirmative, will have to make a good number of concessions-which, analysts have argued, it's prepared to do.
Verizon CEO Daniel Mead, who told Reuters in a March 21 report that Verizon is not interested in teaming up with Sprint, added in regard to AT&T's need for approval from federal regulators: "Anything can go through if you make enough concessions."