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AT&T/T-Mobile Block Harms Job Creation

Stocks in this article: T DT S VZ

For example, when Bell Atlantic merged with GTE and Airtouch, opponents warned the deal would "create an economic Frankenstein, an unregulated monopoly that will do nothing to improve the quality of life..." Four years later, we were cautioned, the AT&T Wireless-Bell South combination to form Cingular "spells bad news for consumers, who ultimately can expect higher prices and diminished service."

When Sprint (S) merged with Nextel, doomsayers declared that it "likely spells an end to the lower prices and innovative services consumers have received from cell phone companies." We heard more of the same when Verizon (T) merged with Alltel on June 5, 2008.

Each dire warning has been dead wrong.

Throughout this decade of wireless consolidation, consumer prices have fallen and services expanded. According to the 2010 U.S. GAO report, wireless prices declined 50% from 1999 to 2009. From the first quarter of 2005 to the last quarter of 2010, even though the average American sent 703 more text messages, prices fell 84%. Similarly, between the third quarter of 2008 and the fourth quarter of 2010, the effective price per megabyte declined approximately 89%.

Mobile broadband markets are incredibly competitive: according to the FCC, 90%of all Americans can choose from five or more mobile carriers in 2010, up from 76% one year prior. The fact is that wireless industry consolidation has been and remains healthy for consumers and essential for those who build upon the dynamic wireless platform; it has enabled critical investment in infrastructure, innovations in business models and great leaps forward in wireless architecture. The market is working...government just needs to stay out of the way.

In this case, the proposed merger will enable AT&T to serve more than 55 million new customers with much higher speed services, upgrading its networks to handle exploding traffic while creating thousands of new jobs here at home. It offers a win-win for consumers and the economy, gaining the support from voices as diverse as the Communications Workers of America, Facebook, Qualcomm, RIM, TechNet, the Wall Street Journal, Kleiner Perkins, Sequoia Capital and 27 state Governors from around the country. The question is whether D.C. denizens understand innovation and job creation better than these innovators and local leaders.

As we look to refuel the American job engine, policy matters. Policy makers should first do no harm. Opposing the combination of AT&T and T-Mobile will do significant harm to mobile broadband investment, rollout and employment. This is a chance for all of these to support efforts to grow the economy -- and we should move ahead to see them realized as quickly as possible.

Bruce Mehlman is co-chairman of the Internet Innovation Alliance and served as U.S. Assistant Secretary of Commerce for Technology Policy from 2001-2003.

This commentary comes from an independent investor or market observer as part of TheStreet guest contributor program. The views expressed are those of the author and do not necessarily represent the views of TheStreet or its management.
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