DOJ and FCC Decisions can Make AT&T® Much Powerful

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Telecom experts say that the future of AT&T® can be shaped by two decisions in Washington. The first one is the announcement of the Federal Communications Commission to roll back net neutrality rules, and the second one is the decision of the Department of Justice to sue AT&T® to block their 85 million buyout of Time Warner®.

Some of the telecom analysts said that the combined effects of both these decisions might offer a double victory for the Telco. If AT&T® wins the antitrust case against the Justice Department, they will be able to buy Time Warner® without the need to provide any concessions to the Federal government. In addition, they will benefit from the abolishment of the net neutrality rules by the government, which will allow them to leverage the television stations, library of shows, and movies of Time Warner®.

Many Wall Street analysts opined that the chances of AT&T® winning against the antitrust officials are very high. The Department of Justice was unable to use the courts successfully to stop the merger of two different types of companies since the 1970’s. Randolph May, who is the current President of the Free State Foundation said, “The rollback of the [net neutrality] rules might give AT&T® more flexibility to obtain more benefit from the merger with Time Warner®.”

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The net neutrality rules were passed in 2015 by a Democratic lead FCC to ensure that all the websites, small and large, will be treated equally. Revoking the net neutrality regulations would allow the internet providers like Comcast®, AT&T®, and Verizon® to block the sites that they do not promote and charge businesses for faster delivery of their contents. Some analysts said that net neutrality rules of the Democratic led FCC left most of the internet providers spooked.

“One can’t imagine that there are any broadband providers who would be eager to test the limits of what is now allowable under this regulatory regime, given the enormous risk of popular and/or regulatory or legislative backlash,” said Craig Moffett, the chief analyst at MoffettNathanson.

However, the consumer advocates says that relying on after the fact enforcement of the rules will not be a substitute for preemptive and clear rules seeking to prevent users from being harmed.

“Taking FCC [rulemaking] power off the table leaves us with only antitrust authority to rely on to protect consumers,” said Susan Crawford, a law professor at Harvard University. “Which won’t be enough, in the long run.”

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