AT&T compromise may get merger approved
WASHINGTON - AT&T Inc. has offered a new set of concessions that are expected to satisfy the two Democrats on the Federal Communications Commission and lead to approval of the company's $85 billion buyout of BellSouth Corp. Approval by the full commission could happen as soon as Friday.
Context & Ripple Effects
AT&T had already positioned the transaction in its March push to blunt smaller phone rivals. By December, it was also testing its U-verse television service while encountering suburban resistance to fiber rollout, making the FCC decision consequential beyond the corporate combination.
The new concessions turn a pending commission vote into a negotiation over operating conditions, with the two Democratic commissioners holding the deciding leverage.
First-order effects
- AT&T's proposed 30-month net-neutrality commitment gives the FCC's two Democratic commissioners a concrete basis to support the still-pending BellSouth approval.
- AT&T must accept merger conditions as the price of clearing the $85 billion transaction, rather than treating approval as an unconditional consolidation.
Second-order effects
- The FCC gains leverage to use behavioral commitments in place of an outright rejection, making AT&T's network practices part of the merger review rather than a separate policy dispute.
- AT&T's smaller phone rivals face a regulator willing to attach obligations to scale-seeking combinations, even as AT&T pursues U-verse deployment.
Third-order effects
- If this conditional-approval approach holds, major telecom mergers will be negotiated as packages of consolidation and network-policy commitments, increasing the FCC's role in shaping post-deal conduct.
The trend: Telecom consolidation is becoming a bargaining process in which FCC approval depends on enforceable commitments about how enlarged carriers run their networks.