By Rick Manning — Imagine that a company wants to leave a market and sell their assets to a competitor, who is a willing buyer as they want to invest in expanding their operations.
Imagine that the company that wants to sell has decided to not invest any more resources into the market they are leaving, so their product becomes progressively worth less every passing month as technology moves the marketplace past them.
Imagine that the federal government then intervenes to tell the company that is going to leave the market that they cannot sell their diminishing asset to the willing buyer.
In a nutshell, that is what happened to AT&T in its attempt to purchase T-Mobile.
Deutsche Telekom decided that they are leaving the U.S. mobile telephone market and put their T-Mobile network on the market. They are not going to invest money to upgrade their system to meet the demands for 4G technology.
AT&T, looking to expand its mobile network capability in the U.S., saw the T-Mobile asset as being a great fit to meeting consumer demand for faster, more capable service. The build out of AT&T’s wireless infrastructure that would have resulted if the AT&T/T-Mobile deal had gone through would have resulted in 96,000 new U.S. jobs according to the liberal Employment Policy Institute.
Yet, the Federal Communications Commission (FCC) decided that AT&T could not purchase T-Mobile because they feared that AT&T might do too good of a job of meeting customer demand making it unfair for other providers.
Of course, it is a little more complicated than that, as one of T-Mobile’s primary assets was its spectrum, and that commodity will increase in value as it is a limited resource. Spectrum is the wavelengths of energy that radio, television and cell phones use to transmit images and voices into people’s homes, autos and phones, which the FCC auctions to bidders.
Ultimately, what AT&T wants to buy is T-Mobile’s spectrum which would allow them to significantly increase their service to the U.S. consumer.
And ultimately, the FCC decided to prevent AT&T from buying it out of fear that Verizon, AT&T and Sprint will be dominant players in the market. So, instead, the American consumer will be left with less investment in new technologies and limited choices, all because the Obama Administration doesn’t believe T-Mobile’s German ownership that they are skipping town and aren’t going to invest any more money in upgrading their product in the U.S. market.
When is this Administration ever going to learn?
Rick Manning is the Director of Communications for Americans for Limited Government.
