AT&T Facing ‘Steeper Climb’ in T-Mobile Deal, Copps Says
AT&T will have a “steep climb” if it wants to take over T-Mobile, FCC Commissioner Michael Copps said. “You will remember in the Comcast merger that I said at the outset that it would have been a very steep climb for me. I ended up voting against it,” he said in a videotaped interview for C-SPAN’s The Communicators. “This is maybe even a steeper climb from the standpoint of a lot of power, a lot of influence given to one company in a world where two companies are going to control, like, 80 percent of the spectrum.” Copps worries about “what residue of competition will be left if the merger is approved,” what impact it will have on U.S. jobs and whether the bulk of the proceeds will flow into Europe’s telecom market, he said. T-Mobile’s parent is based in Germany.
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"As much as anything, what kind of troubles me is that it just kind of sucks the oxygen out of so many issues that are pending before the Federal Communications Commission,” Copps said in the interview, to run on the cable network this weekend. “We can chew gum and walk at the same time, I guess, but this affects so much of what we're doing.” He has voiced worries that the merger talk will unsettle discussions of spectrum auctions and the D-block -- not just at the commission, but on the Capitol Hill, too. “I think those are all factors that might have the effect of encouraging some folks to say, `well, let’s see what happens before we go ahead and act,'” Copps said.
Asked his response to a N.Y. Times piece calling for the commission to impose merger conditions such as data roaming, divestiture, and nondiscrimination rules, Copps said “there’s a lot of merit in there,” but there’s a bigger set of questions that ought to be asked. “Why do we spend so much time trying to make what some people would deem the unpalatable to minimally acceptable?” Copps said. “Is that the kind of telecommunications market we ought to be working for? Is that the best we can do for competition? Is that the best we can do for consumers? Is that the best you can do for jobs?” AT&T officials didn’t respond to requests for comment.
Merger foe Free Press cheered Copps on. “Like your favorite sci-fi villain, AT&T has slowly reconstructured [sic] its market power after the break-up of Ma Bell,” Political Adviser Joel Kelsey said in a written statement: “Commissioner Copps is on the right path pointing out the structural problems in the wireless marketplace and we hope policymakers follow his logic."
Copps indicated conditions may not be enough for AT&T/T-Mobile, and at a minimum he hopes that any majority at the commission will look “at this market by market,” he said. He also hopes colleagues will look at “laying out the level of concentration and market power across the board,” and imposing rigorous net neutrality rules, before approving the deal. Copps voted in favor of AT&T’s absorption of BellSouth, but said it was not “a happy” experience and was gratified that net neutrality conditions were imposed. His term as commissioner has expired.
Copps said he’s weary of mergers in general. “You know, I've been at the commission almost 10 years now, and it seems sometimes we're just kind of the federal merger commission,” he said. “That’s because companies bring us so many mergers and it’s always the last one: ‘You know, we're not going to be back.’ But as soon as you approve one, then somebody else is through the door saying, ‘Hey, you let the other guy get real big so you get to let us get too, otherwise it’s not fair.'” He said he hoped the commission will get more active in evaluating telecom consolidation. “At some point we have to decide about whether we're really serious about having competition or not,” he said. “And if you're going to have this constant trend toward monopoly or duopoly, then you're going to have to have some kind of rules of the road. There’s got to be some kind of regulation. Maybe at that point the private sector will understand that any and all mergers are not going to be rubber-stamped."
Copps hopes “a communications civil war” won’t break out over incentive auctions, he said. The U.S. “certainly” needs more spectrum for wireless, but “I consider myself a friend to broadcasters,” particular small broadcasters, he said. The Universal Service Fund and intercarrier compensation regime ought to be finished by the end of the year, if the commission makes clear to everyone that “sacrifices” are necessary, Copps said. “There’s sort of an alignment of the stars. It’s not perfect but it’s sufficient. I would like to see the FCC to have developed a transition plan for fully transforming USF and intercarrier compensation.” Copps said Congress should allow the commission to access intrastate telco revenue. His interview will air on C-SPAN Saturday at 6:30 p.m. and again on Monday on C-SPAN2 at 8 a.m. and at 8 p.m.