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Rural Americans Lose Again: FCC Halts AT&T/T-Mobile Merger

By View From the Hill - National Grange Blog (12/2/11)

  DECEMBER 3, 2011 --

On November 23, 2011, AT&T and Deutsche Telecom withdrew all applications for a merger before the Federal Communications Commission.  AT&T made the decision to pull the applications when the FCC circulated a Staff Analysis which expressed a severely negative response to almost every argument AT&T made as to why this merger was a positive move for the public. The withdrawl of this merger will significantly delay the build-out of rural broadband. That’s right rural America; according to the FCC, broadband build-out in your area will happen just as fast, with or without this merger. That is their claim.

The FCC staff analysis claimed that the arguments which AT&T put forth with regard to expanding coverage from 80% to 97% would occur anyway due to competition. The assumption made by FCC staff, that market competition in these high-cost rural areas will drive private entities to make these investments on their own, is incredibly unsubstantiated. I would highly encourage FCC staff to explore this argument or at the very least back up these remarks with supporting data. As someone who speaks with my rural members daily, FCC staff must be either talking to a different pool of rural folks, or using a very different definition of “rural” to do their polling.

Our members suffer greatly from a digital divide that leaves them without affordable high-speed internet access, let alone competition which provides them choices of providers in their areas.  Additionally, the rationale that build-out will happen anyway stands in direct conflict with every statement the FCC has put forth in the National Broadband Plan and its press releases over the last 2 years.

Two weeks ago, the FCC created a new $4.5 billion broadband fund and the National Grange celebrated this reform of the Universal Service Fund for dedicated broadband. What I find confusing is that the FCC claimed this investment in wireline broadband to 7 million new potential customers, would create “approximately 500,000 jobs and $50 billion in economic growth.” However, their staff report on the merger rejects the argument by AT&T that an investment of billions to deploy 4G mobile broadband service to 55 million more Americans over the next 6 years would help to create jobs. Does that mean that once again, it is okay for big government (armed with my tax dollars) to come in riding on the white horse of job creation, but when big business tries to do it somehow the increased commerce they create disappears?

After the Department of Justice came out in August and said they had questions about the merger, I should have been more realistic and negative about its outcome but I wanted to believe that it could happen.  I wanted to believe that enterprise was still rewarded in this country. I just hope that a different tact might be taken by the FCC in future applications where we can let private companies serve our public, rather than continue to rely on government purse strings to open and fund their needs.

Nicole Palya Wood
National Grange Legislative Director 

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