The chances of an AT&T-T-Mobile merger grow dimmer by the day, but there may yet be hope on the horizon for the telecommunications giants – next year’s election.
The telecom industry has benefited from a change in administration before: In the 1990s, the Federal Communications Commission opposed SBC's acquisition of AT&T during a Democratic administration, only to later approve it under a Republication administration.
The current FCC administration has already indicated its displeasure with the proposed deal, which would unite AT&T, the country's second largest wireless communications service provider, and T-Mobile, the fourth largest.
That prompted AT&T and Deustche Telekom, which owns T-Mobile, to ask to withdraw their application. The FCC has said it will consider their request while AT&T has said it has every right to withdraw it and issued a statement indicating it will sue if the FCC does not allow it to do so.
Regardless of what happens with the FCC, the Department of Justice had already filed an antitrust lawsuit, which is slated to begin in February.
While all of those impediments suggest that a deal is all but dead – though a New York Times article today suggests AT&T is attempting an “11th-hour plan” – there is a second choice beyond getting the DOJ and FCC to approve this current deal. AT&T and T-Mobile could postpone their current efforts and try again under a new president.
While they would need the approval of both the FCC and DOJ to move forward, both of those opponents may change their tune after the election.
If Barack Obama loses to a Republican, who would then make new appointments, rest assured the regulatory environment will become more favorable.
“If the Republicans win, there is a new FCC and a Republican administration will be a lot more positive toward this merger than a democratic one,” said longtime telecom analyst Roger Entner, founder of Recon Analytics.
Also read: AT&T, T-Mobile Merger in Jeopardy, FCC Application Withdrawn
Each Republican candidate has been outspoken about reducing the government’s regulatory enforcement. The most famous example is Rick Perry calling for the abolition of the Environmental Protection Agency – and then leaving that off his list of three, er, two departments he’d get rid of.
But each candidate has made clear that America needs to be more friendly to business. Herman Cain says America is ready for a businessman as chief executive. As Cain's candidacy continues to shoot itself in the foot, enter multimillionaire Mitt Romney.
Romney's new rival Newt Gingrich has spent the past few years as a lobbyist -- or a public advocate. Either way, he is unlikely to increase oversight of any billionaires.
Cult favorite Ron Paul is more a libertarian than a Republican, so one can only imagine how much deregulation would happen if he were elected.
In this case, the regulatory issue is that only four telecom companies dominate the U.S.
