Merging AT&T and T-Mobile in Taxpayers Best Interest

(David Mansdoerfer) – Recently, AT&T agreed to buy T-Mobile for $39 billion dollars. If this deal goes through, AT&T will then become the nation’s largest wireless carrier – supplanting Verizon for the top dog. To many, this deal represents little more than two large companies coming together to make a giant company. To the U.S. taxpayer, however, this deal has the capability to save them hundreds of millions of dollars.

What most taxpayers don’t realize is that they are actually footing a portion the bill when companies expand their broadband services. For instance, in the 2009 Recovery Act, $7.2 billion dollars went to expanding broadband access throughout the United States. However, though this money had good intentions, it was largely wasted duplicating efforts that were already underway. (Government wasting money, where have I heard that before?)

If this deal were to go through, AT&T could then leverage T-Mobile’s network and expand its broadband coverage to underserved portions of the United States. Not only would this alleviate the need for additional taxpayer money to go build up the broadband infrastructure in these underserved sections of the country, it would improve the overall network speed to AT&T’s current customers – a win win scenario.

The problem this merge is having, however, is that the Federal Communications Commission, who is in charge of approving this potential deal, is in position to slap additional burdens and regulations on the newly merged company under the guise of ‘protecting’ competition.

First and foremost, there are over 180 wireless providers in the United States. So any concept that the FCC will be ‘protecting’ competition is a sham.

Second, the broadband/wireless industry has been one of the most successful sectors in the U.S. economy for the last decade – largely in part to the government placing little regulatory burden on wireless carriers. If the FCC were to now limit the operational capability of the newly merged company under the guise of protecting competition, it would provide them with a precedent in which the entire broadband/wireless industry could then be subject to.

The FCC needs to stop standing in the way of one of the most successful industries in the United States. Instead, it should do what is in the best interest of the taxpayer and allow the merger of AT&T and T-Mobile to be completed. Then, the market can take over the expansion of broadband and the U.S. taxpayer won’t be the one holding the bill in the end.

(Mr. Mansdoerfer is the Director of Federal Affairs for Citizen Outreach)