While Economy Burns, Regulators Fiddle

So let me get this straight. The economy is slumping, economists are warning of a double-dip, and the Obama Administration is pleading for companies to invest.

But clearly Obama’s telecom regulators didn’t get the memo, based on the way they are treating AT&T, a company that actually invested almost $20 billion in the U.S. last year, tops in the country.  Rather than encouraging AT&T to speed up investment in this period of economic weakness, the regulators actually seem intent  on slowing down  the telecom provider.

The latest move: An indefinite postponement of AT&T’s request to buy some wireless licenses from Qualcomm, originally proposed in February. From Reuters

AT&T Inc’s $1.9 billion offer for some of Qualcomm Inc’s wireless licenses will be tied to a simultaneous review of AT&T’s $39 billion proposed takeover of T-Mobile USA, U.S. communications regulators said in a letter sent late on Monday.

The Federal Communications Commission, citing the many related issues, dropped the agency’s informal 180-day timeline for review of the Qualcomm deal. The move could significantly delay completion of the smaller Qualcomm deal because the review of AT&T’s bid for Deutsche Telekom AG’s T-Mobile is expected to span at least into the first quarter of 2012.

Qualcomm said swift action on its deal was in line with the FCC’s goal to free up more airwaves for mobile broadband use. The company said the deal would not only re-purpose unused spectrum for wireless Internet services, but it would also allow it to invest and deploy more spectrum efficient technology.

I’m sure this choice seemed perfectly reasonable to the regulators, and who knows, in some ideal world it might be the right thing to do.  But on the day that the stock market is crash,  a move to slow down a successful business sends another signal that the priority of the Obama Administration is regulation rather than the state of the economy today.  No wonder voters don’t believe Obama is serious about jobs and investment. 

Comments

  1. CEOofTheClub says:

    The problem is that stock markets all over the world are going down not just in the US. So the quite international US Companies will be hit even more, when we’ll have a global recession, not just a local one in the US.

    Greetings from Cologne, Germany

    very interesting blog!

  2. I would normally agree with this sentiment, but this issue is a bit more complex. We don’t have a real market in wireless spectrum, because the govt has royally fucked up how it sells our common radio waves. As a result, most markets only have 3 or 4 choices for wireless service, with one less once AT&T gobbles up T-Mobile. What they’re trying to do now is mitigate some of their past dumb decisions, by being careful about the ongoing consolidation in an oligopoly sector, so it may make some sense. It’s all just coloring around the edges considering how they’ve so screwed up the spectrum property rights already, but I don’t know that I fault them for trying a little now. And there is some hope in that new wireless networks are supposedly being built.

  3. Does repeal of a regulatory burden ever happen in a systematic and orderly fashion? Or is collapse a prerequisite?

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