Pro-Regulation Camp Seeks to Undermine Competition Policy in AT&T/T-Mobile Review

May 9, 2011

Like pro-regulation forces did everything they could to undermine competition policy to justify FCC net neutrality regulation last year, those same FreePress-led pro-regulation forces are focused in 2011 on trying to characterize the AT&T/T-Mobile combination as a threat to competition — so that they can impose new regulations on AT&T that they can then try and force on the rest of the industry.

The problem is that the FreePress-led pro-regulation forces are trying to convince people of the preposterous claim that the AT&T/T-Mobile merger will reconstitute the Ma Bell Monopoly when the obvious facts are that AT&T is no longer dominant 27 years after the Bell-break-up.

The Senate Judiciary Antitrust Subcommittee hearing on the AT&T-T-Mobile merger is entitled:The AT&T/T-Mobile Merger: Is Humpty Dumpty Being Put Back Together Again?

Just like it was preposterous last year that the U.S. was falling behind on broadband because of insufficient competition, it is preposterous that the AT&T/T-Mobile merger will reconstitute the the Ma Bell monopoly.

  • First, T-Mobile was never part of the Bell System; it did not exist as an entity at all during the Ma Bell era.
    • But FreePress and its pro-regulation allies have no shame in a trying to establish a narrative totally divorced from the facts.
    • Their demonization of competition policy and the broadband industry has always ignored the facts.
  • And second, as you can see from this chart I created, it is obvious that the Internet competitive situation of today is dramatically different from the 1982 Ma Bell monopoly — in proliferation of technologies, new markets, and in AT&T’s dramatic loss of market share in its old monopoly markets.
    • As the chart puts in perspective, in 1982, AT&T had a ~95% local phone monopoly, whereas now they have only 20%, and that 20% share is falling fast as AT&T is losing several million local phone customers every year.
    • And the chart shows AT&T in 1982 had a ~95% monopoly of the long distance calling market, which now is no longer even an industry, as the service has been largely commoditized by competition and as long distance now is largely a free feature of other services.

In sum, everyone should be able to see through this contrived FreePress AT&T “monopolize everything” narrative as more FreePress-demonization politics to undermine competition policy and advance FreePress’ unwarranted calls to price regulate broadband.

  • Political opponents of this merger apparently have no shame in making up facts to suit their pro-regulation broadband agenda.

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