Tuesday, March 22, 2011

Will FCC Approve AT&T and T Mobile Merger - Absolutely

Can the FCC and Department of Justice ever say no to a deal? It may feel warranted initially but it never happens. These deals go through and for the most part it is for the better. It is the dragging out of the process that seems to hurt both companies and the competitive process. The NYT touts some pretty well known mega deals and most have been approved. But beyond these mergers, including the most recent NBC Comcast deal, what about others in the broader communication industry.

When AT&T was split up into baby bells who would have thought that they would merge and merge again. But despite the threat of oligopoly, new technological changes enabled new competition. The rise of the cable IP phone allowed cable companies to offer competing telephone service. That most likely was never envisioned.

The merger of Sirius and XM into a monopolistic satellite radio company seemed to appear as a huge concern too. But the merger was approved and there remains competition because of both terrestrial radio and mobile music devices. The delay in getting this merger approved only hurt Sirius in maintaining a competitive stance in an ever changing technology world.

And so to the question of the AT&T/T Mobile merger, it too should be approved ASAP. True it reduces the cellular competition into the big two with Verizon (perhaps 3 if you count Sprint), but cellular is facing growing competition from a WIFI world. And I am confident that work is on-going on the next innovation in wireless communication. For AT&T and others, they need to gain economies of scale as the wired side of their business erodes. This merger step forward seems necessary to simply remain competitive in an ever evolving and changing media landscape.

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