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FCC Believes AT&T/T-Mobile Merger Would Harm Consumers

In a call with the media yesterday, The FCC became the latest federal entity to pile on AT&T's proposed purchase of T-Mobile America, when Chairman Julius Genachowski announced that the agency would be reviewing aspects of the proposed deal that appear to run afoul of the public good. The decision follows directly on the conclusions of an FCC committee that found the deal would harm consumers, by establishing what is euphemistically referred to as a 'overly concentrated' phone market, which would likely lead to higher unemployment.

Genachowski confirmed he has asked the other the other FCC commissioners - two Democrats and one Republican - to approve a plan to refer the issue to a judicial hearing, and that AT&T will be required to show that it is in the public interest. This follows on the U.S. Justice Department's recent filing of anti-trust charges intended to block the deal outright. Any judicial oversight approved by the FCC would have to wait until the Justice Department's anti-trust trial has concluded. That trial is scheduled to begin in the Washington, D.C. district court in February 2012.

Naturally, AT&T is not pleased by the development. In an official statement, Senior Vice President for Corporate Communications Larry Solomon reached into a bag full of business-speak cliches, saying that the decision "is yet another example of a government agency acting to prevent billions in new investment and the creation of many thousands of new jobs at a time when the U.S. economy desperately needs both. At this time, we are reviewing all options."

While the final outcome is far from certain, particularly given the uncertainties of an election year in which the current administration seeks to curry favor from American business while addressing the concerns of consumers, expressed most famously in the Occupy Wall Street movement, the fact that two federal agencies working independently from one another does not bode well for the deal. Those of us opposed to the establishment of monopolies run by companies with an established track record of providing weaker services at higher prices can be excused for feeling slightly more optimistic than a year previous.