Tag Archives: fcc

AT&T-T-Mobile Merger Delayed

A few months ago, the FCC said it would hand down a decision on whether to allow AT&T and T-Mobile to merge within 180 days. August 26 was day 83. The FCC decided to reset the clock to zero. So now it will be as long as another 6 months before the FCC announces its verdict.

There’s a comment to made here about regulatory uncertainty. There’s another one to make about the value of the FCC keeping its word. But instead I’ll concentrate on Sen. Al Franken’s recent remarks. “I am very suspicious of consolidation of power,” he told MinnPost.com.

“Big is bad” is an old argument. Age has not given it wisdom, however. Suppose a super-size phone company like a merged AT&T-T-Mobile is so big, clunky, and inefficient that it has to charge higher prices. What a golden opportunity for smaller, leaner competitors like Verizon and Sprint to swoop in and gain market share.

Now suppose instead that the merger gives AT&T and T-Mobile better economies of scale and a faster, more reliable network. Consumers flee their previous networks to join a better, cheaper one. This is hardly consumer harm – which after all, is the usual rationale for antitrust regulations.

Nobody knows if the proposed merger will work or not. But a company’s size doesn’t have much to do with whether a merger should be allowed. If a merger gives diseconomies of scale, consumers will punish it. If it improves service and prices, consumers will reward it.

Unlike the FCC, markets are impartial. Consumers are the proper arbiters of this proposed merger. Let them hand down the verdict.

FCC Repeals 83 Regulations

In July, President Obama issued an executive order requiring independent agencies to comb through their books and axe obsolete or harmful rules. A similar order for cabinet-level agencies in January saved an estimated $1.5 billion in regulatory costs, or a little less than 0.1 percent of total annual federal regulatory costs.

The order gives agencies 100 days to act. The FCC struck a little early by announcing yesterday it was getting rid of 83 rules. The White House is expected to release the final package for all independent agencies today. Total estimated savings are $10 billion over five years. Combined with the earlier executive order, federal regulatory costs could go from $1.752 trillion per year to about $1.749 trillion per year.

One of the rules the FCC is chucking is the Fairness Doctrine, which empowers the FCC to regulate the ideology of political programming. It hasn’t been enforced since 1987 because it violates the First Amendment (“Congress shall make no law… abridging the freedom of speech”). But until now, nobody thought to actually remove it from the Code of Federal Regulations. It’s been sitting there the whole time!

Other hygienic measures the FCC is taking include “the deletion of obsolete  “broadcast flag,” cable programming service tier  rate, and broadcast applications and proceedings rules,” according to an FCC press release.

The repeals will become official upon publication in the Federal Register.

Regulation Roundup

Some of the stranger goings-on in the world of regulation:

-Starting July 1, it will be illegal to use someone else’s Netflix password in Tennessee, even with their permission.

-Buffalo, New York fines 400 citizens over  the length of their lawns. Record rains during the month of May meant record grass growth, which can be difficult for residents to keep in check.

-In the wake of a court decision making it illegal to dance inside the Jefferson Memorial, activists are holding a dance party this weekend. Leonard Pitts has a good column explaining what the kerfuffle is about.

-Texas is continuing its fight against TSA pat-downs. The legislature recently introduced a bill that would treat the pat-downs as sexual harassment, punishable by a $4,000 fine and a year in jail. It was withdrawn after the TSA threatened to ground all outbound flights from Texas. Looks like lawmakers want to reintroduce the bill in an upcoming special session. Utah is considering similar legislation.

-The FCC would like you to pay more for Internet telephony. Traditional landline-based networks have been lobbying the FCC on this issue for some time; now their anti-competitive efforts are bearing fruit.

Regulation of the Day 87: The Volume of TV Commercials

The House passed the Commercial Advertisement Loudness Mitigation Act on Wednesday. If it becomes law, the FCC would control the volume level of television commercials. Some of them are noticeably louder than regular programming. This is, to put it tactfully, irritating.

Rep. Rick Boucher told the Associated Press that “It’s an annoying experience, and something really should be done about it.”

He was talking about the commercials, though his remarks better fit the regulations he voted for.

Still, he’s right that something needs to be done. Loud commercials are a nuisance. They are also avoidable. For example, I avoid them by watching as little television as possible. Maybe read a book or spend time with loved ones instead. There are other ways, too. Here are a few:

-Use the mute button on your remote.

-If you have DVR and you’re watching a show you recorded, you can fast forward through the commercials.

-Change the channel.

-Let broadcasters know how you feel. Tell them not to run loud commercials. You can contact ABC here; CBS here; Fox here; and NBC here. They’d rather you watch their channel than not, after all. And the best way to prevent a viewer exodus is not alienating them.

Besides, they’d probably rather hear from you than the FCC.

(Hat tip to Fred Smith)

Making Broadband Accessible: Innovation, Not Intervention

FCC regulators want to provide wider and cheaper broadband access by subsidizing it, raising taxes, and forcing network owners to share their network infrastructure with competitors.

A few things the FCC should consider:

-Subsidies don’t make broadband access any less expensive. They just change who pays for it. In this case, that would be anybody with a phone. Which probably includes you. The great economist Ludwig von Mises observed that “A government can no more determine prices than a goose can lay hen’s eggs.”*

-The tax would make owning a phone more expensive. And when something becomes more expensive, people consume less of it. With tax-exempt technologies like Skype and Google Voice now available, people can switch away from a taxed phone to something cheaper more easily than ever. The more people who do that, the less revenue the phone tax would generate, defeating its very purpose.

-If a company has to share its network infrastructure with its competitors, it loses the incentive to maintain and improve that network. Why invest millions of dollars if it will help your competition just as much as yourself? Quality suffers. So does innovation. In the long run, it is innovation, not FCC intervention, that will make broadband affordable and accessible for everyone. The long-run view is just as important as the short-run view here.

-Land-based networks are expensive to build in rural areas. The cost per customer is huge compared to denser urban areas. Fortunately, that isn’t as much of a problem for wireless technologies. The FCC seems hellbent on the land-based networks since wireless networks aren’t yet advanced enough for mass-market broadband service. But they will be soon enough. And every dollar spent on old-fashioned wired networks is a dollar unavailable for improving wireless service. An unintended consequence of FCC intervention would be slower innovation.

*Ludwig von Mises, Human Action, 4th ed., (Irvington-on-Hudson New York: Foundation for Economic Education, 1996 [1949], p. 397.