The FCC’s Visible Hand Picked Job Losers in Blocking AT&T – T-Mobile

T-Mobile’s announcement of 1,900 job layoffs is an unfortunate real world consequence of the FCC overreaching its authority, breaking precedent, and disregarding FCC procedure in releasing an unapproved and biased staff report, in order to politically block the AT&T-T-Mobile merger just a few months ago.

A pillar of the FCC’s political justification for blocking the AT&T-T-Mobile merger was that FCC staff did not believe the companies’ analysis of the effect on jobs with and without approval of the merger. The FCC rejected AT&T’s commitment to bring 5,000 call center jobs back to the U.S., if the merger was approved. In rejecting the merger and its job creating commitments and analysis, the FCC helped cause these particular 1,900 call center jobs to be lost at T-Mobile. That’s because the FCC staff, (who admit to not having no expertise in this area) claim to know better than an employer of over a quarter of a million people how new jobs are created in today’s marketplace.

This sad example is emblematic of the FCC’s overreach in authority and expertise in order to try and pick winners and losers in the marketplace. Many at the FCC view the FCC’s public interest authority as a blank check grant of Government power — i.e. whatever three votes at the FCC say “the public interest” is at any given time — which is the gold standard in arbitrariness and capriciousness.

This particular example could be the penultimate in arbitrary and capricious FCC behavior in that the so called “public interest test” effectively was applied by staff without any procedural authority or official authorization of a majority vote of the FCC. The FCC effectively blocked a $39b merger in part because FCC staff said the burden of proof was on the companies to prove the case on jobs.

The FCC’s burden of proof standard is central to the FCC’s ability to abuse its power and act arbitrarily and capriciously. Under the U.S. Constitution and under all antitrust law at the DOJ and FTC, the burden of proof is on the government to prove a market transaction is harmful under due process that one is innocent until proven guilty. Not at the FCC under its public interest standard. This obsolete FCC public interest standard assumes a monopoly marketplace and that technology and businesses will harm consumers unless the FCC determines otherwise — in advance. In the FCC’s trampling of due process in handling the AT&T-T-Mobile merger, the FCC staff in effect assumed AT&T guilty until it proved itself innocent, and denied AT&T and T-Mobile its day in court.

The FCC’s abuse of its political public interest standard spotlights that the FCC’s exercise of 80 year-old, pre-competition policy-era, public interest authority is obsolete. The notion that communications markets are monopolies where consumers have no competitive choice and the FCC must assert an all-powerful Federal command and control role over communications, and must adopt a “Mother-May-I?” stance in effectively duplicating the DOJ antitrust authority without any statutory to do so, is obsolete as well.

In sum, if the FCC’s job analysis here was this off-base, what about the FCC staff’s other core public interest assumptions?

The FCC continues to self-servingly misinterpret what promoting competition is all about. It is not about ignoring the “invisible hand’ of market forces and asserting the all-knowing FCC “visible hand” to pick market winners and losers. Market competition is driven ultimately by economics, profit, and return on investment. Competition can’t flourish when the FCC applies uneconomic assumptions, discourages private investment, and creates market uncertainty with unnecessary arbitrary and capricious regulatory behavior.

 

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