PublishedSeptember 28, 2011

AT&T to Verizon : “We’ll Keep the World Safe for Big Telecom Mergers, You Go Kill That Pesky FCC Open Internet Rule”

Ahh, the co-ordinated effects possible between two giant duopolists.

Now that the trial schedule has been set for the new 21st century U.S. v. AT&T antitrust case, AT&T litigators will be vigorously defending in court the iconic behmoth’s right to acquire and thereby eliminate one of its three national mobile telecom competitors, T-Mobile.  If successful, the acquisition will go a long way toward clearing a path for a future Verizon takeover of a smaller competitor or competitors.   Verizon knows that, and so even though AT&T would be leapfrogging it in size and market share with this transaction, they’re cool with it.  Maybe even supportive.  The trial date is set for February 13th.

Meanwhile, back at the FCC, AT&T still has to work hard to win parallel approval for its merger, due to the transfers of wireless licenses involved.  An agency self-imposed 180-day shot clock is running again, but nobody really thinks the FCC will issue a decision ahead of the antitrust court determination.

What the FCC has just accomplished this month is publication in the Federal Register of its first rule to maintain public access to the open Internet.   That’s where Verizon comes in.  Its first court challenge to the open Internet rule failed because it was filed prematurely, but a brand new opportunity presents itself here.   Verizon is expected to challenge the FCC again early next month, and argue that the DC Circuit should have exclusive jurisdiction, and that the FCC has no authority to promulgate rules governing broadband Internet access.   AT&T is totally cool with all of this as well.

Further, now that the FCC rule has been published, the clock is also ticking in the Senate on a Resolution of Disapproval under the Congressional Review Act. (CRA).   A resolution to repeal the FCC open Internet rule already passed the House earlier this year, but now it will be ripe for consideration by the full Senate (under CRA waiver of all regular procedures involving Committee action and cloture votes etc…) anytime after October 13th.   Word is AT&T will not be lobbying their Senate friends to whom they’ve been trying to sell the T-Mo merger, but no matter, Verizon again has it covered.

Throughout all of this, it’s mostly the same smaller carriers, online search engines and e-commerce companies, along with the same public interest groups that comprise the loyal opposition.   Legal, regulatory and public relations resources on this side do not begin to match those of either AT&T or Verizon alone, much less combined.

Hopefully the law will protect the public interest anyway.

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