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FCC Merger Approval: How Long is Too Long?

December 15, 2006 - 2 Comments

WASHINGTON, DC – It seems like another rerun. The FCC again delays consideration of the AT&T/BellSouth merger. The soap opera over the deadlock among the Commissioners, the possible conditions on the merger, and whether Commissioner McDowell will participate in the decision drags on. How did we ever get to this point? And why is the FCC so pivotal in this decision.Regardless of what one might think about whether the merger is good, bad or indifferent, there are real problems with the process that the FCC uses to approve mergers. Timing is everything, and having a predictable timeframe for making a decision on a merger is important to both the merging entities and the whole industry. When two large companies are merging, many business and investment decisions are put on hold until the merger is completed (or blocked). These decisions affect the employees of the companies as well as all the suppliers and customers of the companies. The economic impact of a long delay can be profound, particular if it delays tens or hundreds of millions of dollars of investment or purchases.Part of the delay in the current AT&T/BellSouth process has been debates on conditions that are really unrelated to the merger itself. For instance, it is difficult to see how Net Neutrality is implicated in this merger. No matter which side of the Net Neutrality debate one stands on, there is nothing in this merger that changes the premises on which the Net Neutrality debate is based. In the broadband Internet access market, it is an adjacent market situation which neither increases nor decreases the ability of the merged company to engage in practices that Net Neutrality advocates abhor. But because Net Neutrality advocates cannot obtain the regulations that they desire on their own merits, they are trying to shoehorn it into merger conditions. (One notable exception to this is Yahoo!, which has told the FCC that it should not impose “nondiscrimination” Net Neutrality rules only on AT&T and not other providers. Yahoo!’s position is a breath of intellectually consistent fresh air in this stale debate.)Other regulators seem to be able to do their jobs of approving or rejecting mergers fairly quickly and efficiently. Indeed, the FCC itself has set a goal of 180 days for taking action on a pending merger. So it’s time to take extraneous issues off the table and come to a decision. An entire industry is waiting.

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  1. Well.. FCC releases full text of AT&T-BellSouth and the merger approval order was given on March 27, 2007! I had a quick read through the order notes and I found out that the FCC believes the upside to this merger includes increased broadband deployment, competition for video programming across more avenues and outlets, lower costs, and efficiencies related to vertical integration.”””^0^1^^^0^0
    10308^5246^Fred^^^^2008-05-22 19:33:15^2008-05-22 19:33:15^You have your chance to be in the backbone based in the United States of America that supports 400 million poor people around the globe and 100 million accounts ran through 25,000 miles of dark fiber in the states. Lets see what you do.I assume your office does the A-76’s for Cisco?^0^1^^^0^0
    10309^5249^Don Brontes^^^^2008-05-22 19:33:15^2008-05-22 19:33:15^”I love the analogy and agree, we really need a stronger push in accessibility and availability of broadband in this country. As a subscriber to a residential t1 line, I would like to think that I have John Wayne”” style broadband, but the Joe Q. Public deserves easier access to bandwidth.”

  2. It seems that Michael Powell wants to empower his position more than during the former President and to assure that the business he runs is not heading to a certain decline. Let’s see what comes out of some relations with Sprint and WorldCom.