So much to choose from! I’ve gotten through the first half of the FCC’s analysis of the AT&T-T-Mobile merger. To my utter lack of surprise, all the things you or I might have intuited about this deal have been found to be valid or minimally raising doubts about AT&T’s claims.
Just to name a few items from this draft report produced by the FCC staff: regional wireless players are not credible competitors to AT&T in a poster-merger environment; AT&T and Verizon would have incentive to coordinate pricing post-merger; serious concerns raised about reduced competition in roaming arrangements for GSM and HSPA-based services; adverse impact on wholesale wireless services; and strong questions about backhaul competition.
And for your reading pleasure, a few choice excerpts:
“Regional and smaller providers face spectrum constraints that would hinder their ability to replace the current competitive constraint of T-Mobile or to deploy extensive broadband networks.”
“… we conclude that the loss of T-Mobile as a competitive alternative wold give post-merger AT&T a unilateral incentive to raise price …”
“These data demonstrate high concentration and substantial increase in subscriber and spectrum concentration in most individual CMA markets and nationally.”
“The record suggests that over the last few years T-Mobile has been instrumental in promoting competitive entry of alternative backhaul services … We are concerned the loss of T-Mobile’s demand for services from independent backhaul service providers could reduce the market for their services and deter additional competitive entry…”
I’ve saved the best for last. Having discovered issues with AT&T’s assumptions in its own econometric model, the FCC adjusted the model’s inputs to discover that it predicts prices will rise in the coming years. The reports notes that the AT&T model is not very robust, and the FCC’s results should not necessarily be considered predictive. But it does suggest that AT&Ts own analysis may not be credible.
You seem to put a lot of faith in the FCC’s “findings”, though, as the report admits, the FCC often adjusted assumptions as it saw fit. I won’t quibble with your enjoyment of the report, although I will note that at one point the FCC states that S and T-Mo are each other’s closest competitors (which would eliminate a requisite pre-condition for a “unilateral effect”).
My question, though, is that even if the merger was as bad as you believe, are you happy that a supposedly-neutral government agency would behave like an interested party and issue an unsolicited, non-agency-approved “report” as part of the simple administrative act of granting the parties the right to withdraw their applications for review?
The competitive issues are already being litigated by the proper authorities in the proper venue. How did the FCC further the “public interest”? http://bit.ly/s9bpc6
The FCC report was heavily redacted , and I’m not sure how these preliminary words will harm the public interest. The DoJ trial, as you know is currently in the process of working out document discovery, involving some of the models and papers the FCC used in their analysis. The Court already approved the government’s request to share and discuss many of these FCC documents with outside parties.
On the other hand, the model tweaking is not completely convincing–thought it would be interesting to understand more about what the FCC means by non-robust.
Thanks for commenting.