The Federal Communications Commission and Lessons of Recent Mergers & Acquisitions Reviews

Jonathan Sallet, Nov 11, 2015

The FCC’s actions on big mergers and acquisitions have attracted a lot of comment and I’m proud of what we’ve achieved. But why did we come to the views that we’ve held? What were our theories and our core concerns? What forms of analysis did we employ? Some of that is in the public record, some is not. Let me address how we came to take the actions we did.

In the time that Tom Wheeler has been Chairman at the FCC, the Commission has faced the possibility of three telecommunications mergers that I’d like to discuss: First, the suggested Sprint-T-Mobile merger; second, the proposed acquisition of Time Warner Cable by Comcast; and, third, the acquisition of DIRECTV by AT&T. The first was not pursued, the second was abandoned, and the third was approved, with important, pro-competition conditions.

Let’s start with the most important lesson. Chairman Wheeler has recited his basic mantra over and over again: “Competition. Competition. Competition.” (And I know that the TPRC itself beginning in the 1970s may deserve some of the credit for this way of thinking at regulatory agencies). At the FCC, in every transaction review, the burden is on the applicants to demonstrate that a transaction will further the public interest, and that starts with competition. A central question always is: Will a deal bring more competition for the benefit of American consumers?

Of the three proposed transactions, it is not surprising that the one that w