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Thursday, August 04, 2011

States Giving Thumbs Up on AT&T and T-Mobile Merger

Federal regulators, along with various members of Congress, are taking a look at the proposed purchase of T-Mobile by AT&T. Interestingly, state level officials are weighing in as well. And so far, those declarations are overwhelmingly in favor of this deal.

Three state regulatory bodies have given approval to the agreement.

In early July, the Arizona Corporation Commission became the first body to approve the merger. As reported in, the Arizona commission, "which regulates the state's utilities, concluded the transaction wouldn't adversely affect's the firms' state subsidiaries or their ability ‘to provide safe, reasonable, and adequate service,'" with the commission's staff indicating "the proposed benefits are ‘important to the continued and future quality of telecommunications services to Arizona consumers.'"

Following Arizona in late July came Louisiana. The Louisiana Public Service Commission, as noted by, said that "the proposed acquisition has received overriding support locally, as is evidence by the diverse number of groups and officials who are in support." In addition, as noted in, "the staff report argues the deal will result in at least $8 billion in investments, some of which will be in Louisiana, along with increased rural broadband coverage and new jobs in the state, thanks to AT&T's pledge to deploy next-generation wireless broadband nationwide."

And then came approval on July 29 by West Virginia's Public Service Commission, ruling that competition would not be hurt in the state.

Beyond state regulatory bodies, others have weighed in as well.

Governors in 26 states have written letters in support of the proposed merger to the FCC. For good measure, 11 state attorneys general signed a letter to the FCC in favor of the proposed deal.

But why does any of this matter? After all, won't the Department of Justice and the FCC have the final say from a regulatory approval standpoint?

These actions by and comments from leading state officials matter for several reasons. For example, as the Associated Press reported, "state regulators can impose their own conditions on the deal - such as marketing restrictions and employment promises."

But perhaps more importantly, federal regulators consider what's being said in the states. If the message from state regulators and elected officials overwhelmingly is that this is positive for consumers, businesses and the economy in their respective states, then that is a significant declaration "on the ground", so to speak, about the real benefits of the merger.

Louisiana Governor Bobby Jindal summed up the impact this merger on his state's economy in a May letter to the FCC. Jindal, in part, wrote:

"The availability of mobile broadband is a critical component to drawing in new businesses and growing the ones already in our state. With this merger, Louisiana communities and businesses, especially in our rural areas, will be able to participate and compete even more in the global economy. More than half of Louisiana's parishes are considered rural, and the expansion of technology here will help spur both innovation and economic development in areas that need it the most. Job creation has been a major focus of my administration and I support any efforts that aid our state in moving forward. Adding mobile broadband capacity will help create more opportunities for Louisianians-Louisianians who will not have to leave our state to secure a great education or find a rewarding career."

These remarks could and do apply to other states. Federal regulators would be wise to take heed and not interfere with the dynamism, innovation and investment taking place in the private sector that are benefiting entrepreneurs, small businesses, workers, and consumers across the nation.


Raymond J. Keating serves as chief economist for the Small Business & Entrepreneurship Council.

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