AT&T Throws in the Towel on T-Mobile – Regulators, Yet Again, Hoodwink American Consumers to Benefit Competitors

by Mike Wendy on December 20, 2011

The following statement may be attributed to Mike Wendy, Director of

Alexandria, VA, December 19, 2011 – This afternoon it was reported that AT&T has officially thrown in the towel on its bid to merge with T-Mobile.  Citing insurmountable opposition in receiving regulatory approval, the company decided to go no further in its quest.

Sadly, the failure rests not with the company – which, experiencing a spectrum crunch, was primarily seeking to alleviate that – but rather with a system that has all but strangled necessary inputs for growth by erecting Star Chamber-like schemes and permission slips that network providers must jump over in order to serve consumers with new, innovative and job-creating products and services.

Quite frankly, policymakers failed here.  When given the chance to let the market do its job, they interjected their own vision of what markets should look like, and then refused to allow AT&T to proceed.

It is hard to imagine a more competitive communications landscape than what we have right now.  But regulators have.  What that is remains a mystery, of course.  But, one thing we do know from this exercise is that that “utopian” market will not be for want of central-planners.

We’ve been here before.  Yet, we haven’t traversed this territory either.

Today, consumers win through the rapid evolution of technology, a proliferation of consumer tools and information, industry best practices and reputation management, vibrant intra and inter-modal competition and minimal consumer-harm backstops.  Prices have remained low, and innovation at the core and at the edge abounds.  Still, Uncle Sam wants to impose its 19th century idea of monopoly regulation on what are America’s largely self-regulating, 21st century  communications networks.

Increased competition would have resulted from a consummated (and even heavily-conditioned) deal.  That’s what AT&T’s competitors worried most about. Now, they got their wish: A stagnant market with handpicked competition, which keeps prices high and profit margins healthy – for competitors.

As for consumers – such a result rarely works to their benefit.

Previous post:

Next post: