10.01.2012 in Big Government, Politics by Rick Manning 38

FCC’s regulatory overkill kills 96,000 jobs in blocked AT&T, T-Mobile merger

By Rick Manning — Imagine that a company wants to leave a market and sell their assets to a competitor, who is a willing buyer as they want to invest in expanding their operations.

Imagine that the company that wants to sell has decided to not invest any more resources into the market they are leaving, so their product becomes progressively worth less every passing month as technology moves the marketplace past them.

Imagine that the federal government then intervenes to tell the company that is going to leave the market that they cannot sell their diminishing asset to the willing buyer.

In a nutshell, that is what happened to AT&T in its attempt to purchase T-Mobile.

Deutsche Telekom decided that they are leaving the U.S. mobile telephone market and put their T-Mobile network on the market.  They are not going to invest money to upgrade their system to meet the demands for 4G technology.

AT&T, looking to expand its mobile network capability in the U.S., saw the T-Mobile asset as being a great fit to meeting consumer demand for faster, more capable service.  The build out of AT&T’s wireless infrastructure that would have resulted if the AT&T/T-Mobile deal had gone through would have resulted in 96,000 new U.S. jobs according to the liberal Employment Policy Institute.

Yet, the Federal Communications Commission (FCC) decided that AT&T could not purchase T-Mobile because they feared that AT&T might do too good of a job of meeting customer demand making it unfair for other providers.

Of course, it is a little more complicated than that, as one of T-Mobile’s primary assets was its spectrum, and that commodity will increase in value as it is a limited resource.  Spectrum is the wavelengths of energy that radio, television and cell phones use to transmit images and voices into people’s homes, autos and phones, which the FCC auctions to bidders.

Ultimately, what AT&T wants to buy is T-Mobile’s spectrum which would allow them to significantly increase their service to the U.S. consumer.

And ultimately, the FCC decided to prevent AT&T from buying it out of fear that Verizon, AT&T and Sprint will be dominant players in the market.  So, instead, the American consumer will be left with less investment in new technologies and limited choices, all because the Obama Administration doesn’t believe T-Mobile’s German ownership that they are skipping town and aren’t going to invest any more money in upgrading their product in the U.S. market.

When is this Administration ever going to learn?

Rick Manning is the Director of Communications for Americans for Limited Government.

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  • JJM

    I’m not a fan of AT&T anyway. Every time I deliberately change providers to get away from them, they end up buying my new provider. Same thing seems to happen with Chase Bank. Perhaps I should change providers again and buy stock in my new providers?

  • Viet Vet

    And now the government do gooders will use a good business plan against you because you may provide a better quality of service to the consumer.  You gotta be kidding these thugs are going totally crazy!

  • Ted McGarry

    A company wanting to leave a market can sell to a competitor, just not to any of the top three. The FCC is preventing the top three from getting bigger by consuming the smaller players because it would reduce competition. There was no competition in the US auto industry controlled by the big 3, until Japan entered the market.

  • Anonymous

    As much as any anybody may hate a monopoly, the Constitution of the United States does not authorize the federal government to regulate the phone industry. It’s unconstitutional, and unless the states specifically authorize a new ammendment to the constitution giving the government this power, it is acting like CAESAR! The FCC should be abolished in favor of local control over such matters as the states deem fit.

  • Anonymous

    Our more than equal elite betters in high government are here to take care of us, for we are not We The People but ignorant bleating sheep who are clueless and lost without our due dictatorial guidance.  Comrade citizen, you know that. 

  • Anonymous

    I am AGAINST THIS MERGER!!!!!!!!!!!!!!! 2 OF THE LARGEST CELL PHONE PROVIDERS DO NOT NEED TO MERGE!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!
    SO I AM GLAD THAT THIS WAS BLOCKED BY THE GOVT!

  • Jwatersphd

    Yes, Rick, as you said, “it is a little more complicated than that.” And your ceaseless bias against any kinds of controls – such as on pollution, monopolies, etc. – are all too apparent here, as you sarcastically – really, that kind of nonsense ought to be below you – say that the FCC did this because they feared ATT might do “too good a job.” Get a grip, Rick. The Federal Government, the state governments, and Obama do NOT come into these things to try to make things worse or make sure someone doesn’t do something good. Your piece is a blast, completely unfocused, against the FCC, and gives us NOTHING in the way of real facts to help us deliberate about the matter. How about some clarification; how about if you really try to understand their logic, instead of, as you often seem to do, feel that you’ve just got to come in with another way it’s wrong to have any regulation of industry. By now I pretty much expect from you the notion – maybe you’re a Ron Paul kind of guy – that we basically live in a jungle, that might makes right, and there are really no considerations beyond how a few people can make the most profit. We already have Bill playing that note, over and over. Every consideration as to how an enterprise might be harmful, and every proposal to curtail that, is blasted as “job killing,” to the point that the thoughtful reader wonders whether you have any understanding of the complexities at all. It took years to get the Microsoft monopoly business straightened out, and there were a lot of conflicting considerations. You make it sound as if this is “real simple” and of course here comes the job killing Obama administration to get in the way of a man looking to make an honest buck. You must know better – or, maybe you don’t . . . in which case, why are you presuming to write a column like this? Just to be alarmist?

  • Anonymous

    the Obama administration is doing everything it can to kill jobs from the fiasco in South Carolina with Boeing, the AT&T T-Mobile, oil drilling, the Keystone Pipeline and on and on. If Obama had been so interested in creating jobs, he would have tackled that his first year in office instead of pushing through Obamacare which the majority of Americans don’t want.  This is a dictator presidency.  Imagine what four more years will do and not having to run for re-election.  This country will be gone.  It will be like Venezuela and many of the other dictator-dominated countries while the Emperor and the Queen throw out crumbs to the peasants.

  • Dean

    Like I have said over and over again.  Come on CONGRESS,  defund the FCC, the FDA, the EPA, the NLRB and every other agency that is run by a czar and start over without Obama’s appointees and no more czars.

  • Dean

    Like I have said over and over again.  Come on CONGRESS,  defund the FCC, the FDA, the EPA, the NLRB and every other agency that is run by a czar and start over without Obama’s appointees and no more czars.

  • Dean

    What rock have you been living under the past 3 years, Jwatersphd?

  • Dean

    What rock have you been living under the past 3 years, Jwatersphd?

  • Dean

    You got that right, pduffy.

  • Dean

    You got that right, pduffy.

  • Highsider

    This administration had already learned all it ever intended to learn, before it was elected.  It has stuck to it’s plan of obfuscation and double talk, while deliberately trying to destroy the USA from under the table.  It’s working fine so far, so why would they change course now?  Just give them one more term to finish the job.

    The myriad Czars, the selective enforcement, using the Constitution as toilet paper and the so called “Recess Appointments” taking place when there is no recess of congress, are just the begining of the end.  Stick around and see what’s next.

  • Ssergey2002

    I am not sure what is wrong with being a “Pon Paul kind of guy”- I am, and I am proud of that. This being said, I would be very interested in hearing your points in defense of FCC, instead of reading your ad hominem attack on the author.

  • Anonymous

    I have NEVER seen a merger of any type lead to more jobs.

  • Ssergey2002

    Generally, I am also against this merger, which does not mean that hyper-extended Executive brunch of government should regulate it via unconstitutional action. Btw, T-mobile is not the largest provider; it’s #4 after Verizon, ATnT, and Sprint, but your point is well taken.

  • Jwatersphd

    Yeah, Dean, you said it, man. Who cares if our food and drugs are safe, if someone’s poisoning your air and making your rivers so polluted they catch on fire? We’re real men, after all, and everyone deserves to make a buck no matter what the cost to the rest of us. And while we’re at it, let’s go back to gold coins. We don’t need no stinkin’ banking system … or, if we do, of course the bankers will take good care of us, they don’t need no oversight. You got it, man; let’s have a free for all! But don’t come crying to me if you get sick from the milk you drink – just stop buying it. Don’t bitch if thalidomide produces thousands of monsters with no arms and legs. Let market forces take care of it – they’ll probably stop making dangerous drugs once people catch on . . . won’t they? Caveat emptor, I say. Don’t trust anything until you’ve tried it. If you live long enough to discover it’ll kill you. C’mon man, the idea of safe food and drugs can’t really be that hard for you to understand – can it?

    Oh, by the way – where do you think the FCC, FDA, EPA and NLRB came from? They came from Congress, and if they try to push your naive ideas through by “defunding” the agencies, they’ll just be like the “activist” judges you probably despise, by making laws by budgetary means. Would you like that? 

  • Ssergey2002

    You mean what is left of competition in over-regulated market, with highest in the world corporate tax that only large corporations could survive and  FCC assigning “frequencies” to the companies it favors? If we had free competition if would not come down to the situation when there are only 4 providers in the countries. Unless, of course, they provide the best service and lowest prices possible, which is far from  being the case. 

  • http://twitter.com/crenelle MichaelBrianBentley

    To me, the first thing that was going to happen was ATT shell out $39B to Deutsch Telekom instead of spending that money in the US. The second thing to happen would be laying off a few thousand T-Mobile employees. Third, ATT would raise T-Mobile’s rates. What would happen if ATT spent $39B on infrastructure improvements instead?

  • http://www.facebook.com/people/Thomas-Berquist/100000269520591 Thomas Berquist

    As with the FCC’s illegal move on Net Neutrality, the Obama administration is going to govern by fiat and even if the court rules against them they will ignore and move forward with their Marxist agenda. The Federal courts ruled against the FCC regarding Net Neutrality and they ignored it. The Federal courts ruled against the administration regarding drilling in the Gulf and again they ignored the courts. This administration MUST BE TAKEN DOWN in November, if not sooner, or our Republic WILL NOT SURVIVE.

  • Jwatersphd

    if i attack the author, it’s not an ad hominem attack on the post. An ad hominem attack is one that says the argument’s not valid because of who the person is who’s making it. I attacked the post because there is no information in it, to speak of, just a bunch of folksy “imagine that”s which oversimplify the matter beyond belief. I also attacked it because of the obvious assumption, indicated in the sarcasm, that the FCC would really be trying to make sure good service wasn’t being provided. Anyone who really believes that the people in our government are simply out to do bad things is wildly out of touch. Not everything it does is good, but we’ll get to that in a minute. I attack the author because this is typical of his articles: uninformative, cheap shots, and so on. I think we can expect more. I don’t feel like putting forth a defense of the FCC in a blog post, but you might want to look around and see that there are plenty of people writing in with defense of the FCC’s actions here. If all the FCC were trying to do was to make trouble, i don’t think you’d have people writing in to praise the outcome. I think this is probably one of the few times I’ve seen people on this forum defend anything that comes from the government. Which does NOT make what the FCC did right, all it means is that Manning’s attempt to paint this as just one more instance of how gov’t always screws things up seems to have overlooked a few subtleties. There’s plenty wrong with Ron Paul, and plenty right with him. Unfortunately, most of his strongest talking points are so inapplicable to the modern world that the country would be brought to a standstill and we’d be waiting here as isolationists. He simply has no conception of the complexities of the modern world. Sure, Iran has a perfect right to block the strait of hormuz… 

  • Jwatersphd

    Have you got a point, here, Dean? Or do you just like different forms of name calling? 

  • Ssergey2002

    I am glad you look up the definition. Unfortunately, it does not change the fact that you attack the author and not the post. The author made some points: 1) possible jobs are lost; 2) act of gov’t interferes with free market and is unconstitutional; 3) T-mobile will not invest in its infrastructure, etc. All you did was to attack the author. May I wonder which school has awarded you a PhD?

  • Jwatersphd

    I didn’t look up the definition; it’s a commonly used term. I attack BOTH the author and the post, if you would care to actually read it, and what i wrote back to you. As a matter of fact it does “change the fact” – i can attack the author and attack the post without either attack affecting the other.. There is no where in the post that i said because he’s rick manning we can’t believe his points. I also said that his sarcasm betrays a lack of balance, and i expanded on that, giving examples of his oversimplifications. If that’s your idea of ad hominem, suit yourself. I said rick manning writes lousy columns, and this column was especially lousy – catch the difference? Yes, the University of Colorado has awarded me a PhD. What does it matter to you? 

  • Jwatersphd

    Oh, I forgot. Do you mean to say that interfering with the free market is “unconstitutional?” Well, that’s going to be a surprise to a lot of people who’ve read it, and, probably, to the supreme court who’ve turned down challenges to regulations and a lot of other laws because they “interfere with free enterprise” time and time again. And not just “activist” judges, either. He says jobs may be lost, but, as many of the other posters have argued, jobs may also be created. T mobile not investing in its infrastructure is beside the point of whether or not a monopolistic situation is being created. What’s your point? Who cares what T mobile’s going to do? They’re going.

  • Nanna Gail

    Yeah, and now T-Mobil is charging an additional fee to it’s customers, if they want to stay with T-Mobil.  What a way to gouge money from the US consumers huh!  Great job of stealing more merican wealth Deutsche Telekon.  This company should be DRUMMED out of the USA.

  • NannaGail

    Jwatersphd:  Actually Sir, Congress is in the process of being gotten rid of by obummer.  He now declares “He no longer needs Congress, to get his AGENDA done”!

    The fools in Congress think he will keep them in jobs.  Little do they know, a “Dictator”, only keeps those who are useful to him/her.  These idiots have given him everything he wants and are NO LONGER USEFUL to him.

    So, don’t count on “Congress” to help “We the People”, in ANYTHING.  They are USELESS.

  • Bob

    Sorry but AT&T isn’t the better company or for that matter better Customer Service.
    T-mobile is the better. AT&T has lousy Customer Service as least where I lived. So I believe your logic is flawed and I don’t recall the FCC saying what you are stating. I believe there was a lot of opposition from former AT&T customer who are now T-mobile customers.

  • Henry

    Yeah, Jwatersphd, you said it man.  Who is this fool who wants to get rid of the FCC, FDA, EPA and NLRB?  We need MORE!  We need the FCC police roaming our street with sensitive equipment to make sure we only watch and listen to government sanctioned programs paying tribute to our illustrious leader, we need to expand the FDA and have bureaucrats checking every item on our supermarkets’ shelves, the EPA better get busy to find pools of water after every rain downpour so as to find every bit of wetland that needs to be protected from greedy home builders and it is time that a representative of the NLRB is present when you go to your job to ascertain that you have the proper union card and other paperwork, signed by the appropriate Czar, with you and at the same time collect the union dues every week.  And then we need a larger police force to have oversight and be ready with their guns if any of the FCC, FDA, EPA or NLRB’s hard working bureaucrats are having any trouble with us, stupid workers.

  • Ssergey2002

    The branch of executive govt that surpases the powers of congress is unconstitutional. The Congress has constitutional power to regulate interstate commerce, which is the whole different topic and does not apply here. Unfortunately, Supreme court is way behind in lots of no-so-recent developments, since Executive branch with all its “Agencies” has been abusing its power. The regulations selective subsidies for selective companies create trusts; more regulation will not help (look at the bank industry – we went from 5000 major banks to 200 in 15 years, and then bailed “the survivors” out). As far as job creation goes, in the long run the net balance will he negative as next time German company will decide to bring their capital here they will think extra hard about their business exit strategies. (Since 2007 we had lost $7 trl private capital in this country). In any case, I am glad that you started discussing the concrete points of the article. Welcome to PhD club – stick to the evidence-based approach.

  • Drjohngalt

    That’s how the “Free market” is supposed to work.

  • Drjohngalt

    They would be purchasing existing infrastructure which would likely cost MORE than the $39B to create. And while they may lay off a few thousand T-Mobile employees, they would be creating many more thousands of jobs which could absorb those same persons. Rates for upgraded services might have to be increased, although competition based upon supply and demand and the consumers willingness to purchase is what should determine the rates for all private sector businesses who wish to remain solvent. After all they, unlike government, can not print money or stay in business perpetually growing their debt. But then again, neither can government do so perpetually.

  • Anonymous

    This administration doesn’t need to “learn” anything. They know exactly what they are doing. Ask yourself if you wanted to destroy an economy, how would you do anything different from this administration?

  • Cliff

    Y’know, any other time people would be griping about how this move would be giving AT&T an unfair advantage over competition, thus moving them closer to a monopoly, which most everyone agrees is a bad thing. I’m no expert, but the Constitution DOES grant the Fed the authority to regulate interstate commerce, and AT&T’s service would definitely seem to qualify as nation-wide. I’m afraid we’ve reached a point where sane people go into mob-mentality at the very mention of the Fed. It’s understandable; we’re in a seriously bad spot right now, certainly no thanks to the current administration. I’d love to see how 96,000 jobs were supposed to spring out of thin air. Is this entire network currently abandoned, with no one operating it? Are there 96,000 Germans heading home, leaving empty spaces to fill? I call BS on that claim. The author even states those numbers come from a “liberal” source. Would this be akin to the thousands of jobs Obama promised us? Probably. When it comes to “new job” creation, you can count on the liberals to lie through their teeth. While Obama’s administration deserves a lot of blame, I can’t help but feel this story in particular is unwarranted.

  • Vjhnsn

     …where did the FCC, FDA, EPA and NLRB came from? These are ‘government’ agencies, and like all government they grow in size and usurp power they were not given! The problem is that Congress doesn’t keep a closer eye on them and slap them down when they deserve it. Left alone, they do what they want to do. There is always someone who desires more power, and you know what power does!

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