AT&T wants to make a deal. America’s second-largest mobile telephone provider and its largest landline provider wants to purchase DirecTV, the satellite television provider, for $49 billion.
Regulators routinely have to sign off on such mega-deals. At least in theory, they do so in the interest of protecting the freedom of the marketplace from monopolistic practices.
But in this case, the regulators are not protecting consumers — instead, the Washington Post reported last week, the Federal Communications Commission appears to be using this deal as a bargaining chip to buy off one of the larger and better-funded sources of opposition to its Democratic commissioners’ net neutrality agenda.
Essentially, it appears that AT&T will get its deal as long as it agrees to stop resisting and accept the FCC’s restrictions on its Internet service. It’s a quid pro quo in which the regulators make trades to increase their own power instead of protecting consumers.
This is yet another case of what Michael Barone once called “gangster government” in these pages. That’s a nice business you have there — shame if anything were to happen to it — and so Obama and his appointees, playing the role of Don Corleone and his odious henchmen, are here to make you an offer you can’t refuse, for your own protection, naturally.
Chrysler’s senior creditors were the first to have terms dictated to them in this way. Then there were the states, which couldn’t get exemptions from the by-now impossible improvement standards of No Child Left Behind unless they accepted the Common Core education standards.
Likewise, if AT&T wants its DirecTV deal to go through, it apparently has to bow down and acquiesce to a completely unrelated policy supported by the FCC bureaucracy. The regulators have traded away their theoretical role of protecting consumers from trusts in order to buy off an opponent of their net neutrality power-grab.
So what if AT&T control of a massive television provider is bad for the customer? At least the Obama administration has one less company ready to fight (and likely defeat) them in court on the question of regulating the Internet as a public utility.
If AT&T wants to make this deal with the devil, that is the company’s choice. But if the other Internet providers prevail over the FCC in court once again and roll back its attempts to regulate the Internet, AT&T will be stuck with a lousy deal that makes its service slower and less profitable.
As for the “devil” in this case — a federal government that is abdicating its responsibility toward consumers — this is much more worrisome than anything proposed by the private companies it regulates. Government is the single largest force in the nation. America will not be a free country for long if Americans accept the precedent of regulators using their plenary power over one policy area to mow down or buy off opposition in others.
