A Second Chance For the FCC To Make the Right Call With AT&T

Do regulators actually care about the fate of U.S. companies on the world stage? Recent experience indicates no.

Three years ago, the Federal Communications Commission (FCC) blocked AT&T's proposed merger with T-Mobile. Instead of making a statement regarding the poor analysis by AT&T's surely superb legal team, the FCC's then-Chairman Julius Genachowski issued a one sentence statement that the merger did not meet the FCC's standard for approval, injecting ambiguity and exemplifying enforcement on the part of the government when it came to big-stakes mergers. Adding insult to injury, AT&T was forced to pay T-Mobile a $3 billion "break-up" fee revealing how little regard regulators show for the fate of U.S. companies in a competitive international environment.

Now, three years later, AT&T is back with another merger proposal, this time with DIRECTV, one of the two largest U.S. satellite TV companies. Will the FCC demonstrate similar disregard for its regulatory role? A smaller group of the usual suspects is calling on the FCC to block it. They are suggesting the merger will lead to higher prices, lower quality of services and less innovation. On the contrary, the deal will give consumers more choice: an alternative to cable those wanting a better bundle of video, voice, and broadband, as well as a better customer experience and enhanced innovation.

Not only does the proposed AT&T/DIRECTV merger raise no serious antitrust concerns, the merger offers ironclad reasons for the FCC to find that the merger is in the "public interest" - actually 15 million reasons.

Specifically, AT&T has committed to make broadband access available to some 15 million DIRECTV customers who would otherwise not enjoy high-speed Internet. Two million customer locations would gain access to enhanced fiber-to-the-premises wireline broadband service. And some 13 million largely rural customers would gain fixed wireless loop technology as an added value to their satellite TV dishes, allowing broadband speeds of 15-20 Mbps.

If you think every American should have access to broadband service, then this deal gets us closer to that goal. And if you believe that competition in broadband services is a laudable objective to enhance service and reduce costs, then the deal also is a winner. As a merged company, AT&T and DIRECTV would provide competition to areas where there is little or no choice in broadband. The fact remains that together, AT&T will provide millions of Americans either new broadband options or a new and welcome choice to broadband over cable.

Moreover, opening the rural broadband market to competition and releasing cable's grip on broadband is a worthy and achievable goal. State leaders agree: nine governors have publicly praised the deal as a way provide their residents with more affordable access to broadband services. Expanding connectivity in rural America helps create jobs and improve educational and businesses opportunities.

The FCC has taken steps to promote broadband accessibility through programs like the Connect America Fund, which is dedicated to expanding high-speed Internet access in underserved communities. Still, more than 26 million Americans do not have access to broadband, a service which the FCC says has gone from being, "a luxury to a necessity for full participation in our economy and society."

The federal government should not simply throw taxpayer money at broadband. It should remove impediments from companies trying to close the broadband gap. AT&T's commitment to expand broadband service in rural areas is a public good that will bring us closer to our goal of getting all of our citizens connected.