At&T Monopoly

ENM 602

Research Paper

In March 2011 AT&T announced that it agreed to acquire T-Mobile US from Deutsche Telekom – a merger which, if completed would make AT&T the country’s biggest wireless phone company. This merger would also leave us with only three national carriers - AT&T, Verizon Wireless, and the much smaller Sprint. Many people here in the country as well as others abroad thought that the merger was bad news for everyone except AT&T and T-Mobile shareholders. Of course, AT&T did its best argue the case - that the merger of the two companies would allow the new company to have more wireless spectrum to work with; and also that the merger would bring AT&T LTE technology to former T-Mobile customers. In the face of this announcement, Sprint USA asked the Federal Communications Commission (FCC) and Congress to block the marriage on the grounds that it would harm competition and consumers, negatively impact America's economic growth, and stifle innovation (German, 2011).

With this paper, we will first analyze the power of the FCC to regulate companies, preventing two public companies to merge for better services and profitability. Secondly, we will speculate on the ethical issues involved in companies that grow to the point of dominating an industry. Thirdly, we will look at what a merger would mean for existing customers’ contracts?

The Federal Communications Commission (FCC) power to regulate communication companies resides in its creation. Congressional statute created the FCC as an independent agency of the United States government, with the majority of its commissioners appointed by the President of the United States (Communications Act of 1934). This, by virtue, gives the FCC its power as a regulatory agency. The duty of the federal government to administer and oversee matters of national interest is at the core of the FCC establishment through the original Commerce Clause. Under the original Commerce...