Entner: Where is the due process? FCC releases report on AT&T/T-Mobile

Roger Entner Recon AnalyticswAs if Congress needed another reason to focus seriously on reforming how federal agencies regulate trillion dollar sectors of the U.S. economy, the Obama administration's FCC has given their friends on the Hill another reason to press on and quickly. On Tuesday, the FCC convened an impromptu press conference to announce that it was going to release the text of the agency's staff report regarding the proposed AT&T/T-Mobile merger.

Innocuous enough one would think. But hold on. Didn't the parties to the merger withdraw their merger application from the FCC last week? Also, doesn't the full Commission typically vote on matters like approving or denying merger transactions of the size and magnitude of that proposed by AT&T and T-Mobile? The answer to both questions is Yes.

So you may be wondering, what gives? Me too. In what appears to be a zealous effort among the FCC's staff to demonstrate how they really feel about the merger, the FCC has broken with 77 years of precedent by allowing the staff to release a staff report on a transaction that was withdrawn by the applicants and is no longer before the FCC. Until Tuesday, the FCC has carefully and appropriately guarded its internal working documents on merger transactions from outside parties, adhering to its processes and precedents to conduct itself in a disciplined, transparent and orderly fashion. For reasons that remain unclear, the agency decided to abandon its decades-old process of having the full Commission vote on whether to approve or deny a merger transaction of the size and magnitude of that proposed by AT&T and T-Mobile.

What is especially confusing about Tuesday's startling action is that the FCC staff acknowledge their report has no presidential value and is essentially moot and irrelevant to a future application for approval of a deal between AT&T and T-Mobile following the DOJ litigation. One has to ask, what is going on here? Has Washington completely abandoned the concept of due process in favor of political expediency? Has agency staff taken over decision making at the agency regarding significant transactions in the telecom space? Either scenario is not conducive to enabling the kind of robust secondary market transactions needed to create spectrum portfolios that support rapid and widespread deployment of 4G LTE networks.

The hard work of agency staff is a critical component of a strong administrative process and the staff here should be commended for the many hours they have spent considering the proposed transaction; however, jettisoning 77 years of precedent regarding the review and processing of transactions because staff worked hard seems an insufficient justification for the confusion and uncertainty Tuesday's actions have created. Leaving the decision making to the decision makers does not guarantee the merger would be approved, but it would have guaranteed confidence in the process which is so critical to enabling the kinds of secondary market transactions that have made the U.S. wireless sector a global leader in innovation and investment, and have catapulted US wireless consumers to the top of the value chain.

Roger Entner is the Founder and Analyst at Recon Analytics. Recon Analytics specializes in fact-based research and the analysis of disparate data sources to provide unprecedented insights into the world of telecommunications. Follow Roger on Twitter @rogerentner

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