In lieu of the Justice Department’s suit to block the planned combination of AT&T and T-Mobile, there has been some talk of the use of conditions imposed by the Federal Communications Commission (FCC) as an alternative.  

However, history has shown that FCC conditions do not always produce the desired results. Corporations formed as a result of past mergers have sometimes simply ignored requirements, and the fines the FCC is capable of or willing to impose are simply not enough to compel telecommunications companies to act in a manner consistent with its goals.

Just before the Justice Department announced that it was suing to block AT&T's acquisition of T-Mobile, AT&T promised regulators that it would bring 5,000 call center jobs back into the country, if only the merger were approved. Amazon, facing the prospect of paying sales tax in California, promised it would bring 7,000 jobs if only they didn't have to pay those taxes. After noting these parallel promises, Marketplace host Jeremy Hobson quipped, that he promised to create 10,000 jobs if he could be exempted from taxes—honest!

Last Wednesday, the Justice Department planted a very large nail in the coffin of the AT&T takeover of T-Mobile when it filed a lawsuit in the District Court for the District of Columbia Circuit to block the merger.   Deputy Attorney General James M. Cole couldn’t have been more unequivocal about how the Department views the proposed merger:

Today, the Justice Department announced that it is filing suit in federal court to block the proposed merger between AT&T and T-Mobile, saying that it violates Section 7 of the Clayton Act, which prohibits mergers that may "substantially lessen competition, or tend to create a monopoly."

Specifically, the DOJ was concerned with the effects of the consolidation on consumers and innovation, saying that the merger would likely lead to higher prices, poorer quality service, and less innovation and variety in wireless mobile products.

A National Market

Today AT&T announced that it was offering a new feature to some of its subscribers: unlimited calling to any mobile number.  This comes after the news that they were also offering free microcells  (little boxes that boost reception in your home) to some iPhone users, and that Verizon was offering unlimited wireless data to its own iPhone subscribers.  Why is this flood of enticements evidence that there is not very much competition between wireless companies?

So now we’ve had National Broadband Plan Day!. And, despite undeniable flaws and places where the Plan Drafters wussed out/”avoided controversy,” The Plan looks pretty damn good, actually.

Let me stress that: Pretty . . . Damn . . . Good!

If the rumors are true, the FCC may be about to take a big step towards embracing its goal of being data driven, and could open the door to a more competitive Internet Service Provider (ISP) market.

According to reports, the FCC is considering requiring big telecommunications companies to lease their infrastructure to smaller competitors. This, of course, is not a new idea. Back in the day, forcing phone companies to allow competitors to access their wires resulted in thousands of dial-up ISPs competing for business.

The National Broadband Plan is a chance for the FCC to articulate a vision for improving the deployment and adoption of broadband in the United States. In two sets of comments filed this week with the FCC, we highlight recommendations that would encourage new entry into broadband markets, and encourage the FCC to put its treatment of broadband on a firmer legal ground. Additionally, along with many other public interest groups, we're a signatory to this statement encouraging the FCC to adopt a bold, yet pragmatic policy for promoting broadband.

These issues are complex--it's hard to reduce broadband policy to a couple of key phrases. In general, the market structure for broadband services has been shaped by decades of conflicted public policy. We believe that this structure should be moved in a direction that promotes the entry of new broadband competitors. This post will summarize some key points from our separate filings.

Public Knowledge just filed comments urging the FCC to pay close attention to a study (PDF) it commissioned on broadband unbundling. The study, written by Yochai Benkler and his team at Harvard’s Berkman Center, examined international broadband regulatory practices.

This was not just another study chronicling the United States’ decline in Internet prowess. Instead, the Berkman Center team examined broadband markets in a number of different countries. They then tried to figure out what types of regulatory policies were the most effective at increasing broadband penetration and access.

There is a lot of talk and concern these days in the halls of Congress and at both the FCC and the FTC about how to promote greater broadband and wireless phone competition.