PRESS RELEASE: The FCC's Public Interest Authority Is Not a Blank Check!

Regarding the Court of Appeals for the Fifth Circuit’s decision issued today in Texas Association of Broadcasters v. FCC, Free State Foundation President Randolph May issued the following statement:

“For at least two decades now, in this law review article and otherwise, I have been urging the FCC, as a matter of bureaucratic self-restraint and regulatory modesty, to construe the congressional delegation of public interest authority narrowly. The Fifth Circuit’s decision holding that the FCC lacks authority under the 'public interest' standard to require broadcasters to collect and disclose, on a broadcaster-identifiable basis, certain employment data, including that based on race and gender, should be a cautionary tale. In holding the FCC’s regulation unlawful, the Court declared that 'the FCC’s authority to act in the ‘public interest' does not extend outside of the statutorily prescribed tasks that Congress has instructed the FCC to carry out.'

With a standard as concededly amorphous as 'the public interest,' regulators will always be tempted to deploy the delegation as a sword, as they were in this case. While Democrat FCC commissioners surely have been far more prone in the past to take an overly expansive view of the agency’s public interest authority, the temptation exists regardless of party. It should be resisted.

Here what I said in the Conclusion to my 2008 law review article:

With convergence and competition in the communications marketplace a reality, it is indeed time to revisit the application of the public interest standard. Whatever the merits of regulation under the indeterminate standard in the earlier, more monopolistic analog age (and I have serious doubts), the exercise of such unbridled and malleable discretion by the FCC is no longer appropriate in today’s digital environment. Assessments of marketplace competition primarily should guide the Commission’s regulatory decisions. Absent Congress’s or the courts’ narrowing the agency’s public interest authority, which is unlikely, the Commission, uncharacteristically, should heed my modest plea for regulatory modesty. In an exercise of self-restraint, the FCC should commit itself to narrowing the application of its public interest authority."

 

T-Mobile/UScellular Transaction Ripe for Agency Action

According to the FCC's website (see graphic below), the agency's review of the $4.4 billion T-Mobile/UScellular transaction has entered its final month. The record evidence overwhelmingly indicates that consumers, including but not limited to current UScellular customers, would be better off if this deal were approved. Therefore, action prior to the end of the 180-day shot clock is warranted.

In an Opposition to Petitions to Deny filed on January 8, 2025, FSF President Randolph May and Director of Policy Studies and Senior Fellow Seth Cooper expressed their view that the proposed transaction likely would produce pro-competitive benefits, benefits that would outweigh any potential harms. They also noted that arguments against the transaction generally lack supporting evidence and/or a specific nexus to the instant transaction.

T-Mobile and UScellular, GN Docket No. 24-286

Source: fcc.gov

As Mr. Cooper described in a post to the FSF Blog shortly after the parties filed their Public Interest Statement on September 13, 2025, that regulatory filing "presents a prima facie case that [the] proposed transaction … will bring public interest benefits that outweigh any potential competitive concerns."

Tangible benefits identified and documented include faster 5G mobile broadband speeds, higher data capacity, and greater availability of fixed wireless access (FWA) home broadband service, especially in rural areas.

Potential harms, meanwhile, are unlikely given the robust competition that exists in the mobile broadband marketplace, a landscape documented by the Free State Foundation in June 2024 comments to the FCC for its 2024 Communications Marketplace Competition Report. Consumers can choose between three nationwide providers, EchoStar's upstart network that is available to over 70 percent of the U.S. population, mobile virtual network operators (MVNOs) such as Spectrum Mobile and Xfinity Mobile, and regional providers.

Potential harms also would be mitigated by the specific nature of this transaction – in particular, the relative disparity in their respective subscriber bases (126 million versus 4.5 million), the limited extent to which the parties directly compete (as Mr. Cooper pointed out in a February 2025 blog post, the parties "apparently do not have an overlapping competitive presence in thirty-seven percent (37%) of the Cellular Marketing Areas (CMAs) implicated by the proposed deal"), and the fact that T-Mobile sets "its pricing and service terms on a nationwide basis."

In addition, approval of this transaction would enable the efficient and timely reallocation of spectrum to its highest and best use while we wait for Congress to renew the Commission's auction authority – a priority Senate Commerce Committee Chairman Ted Cruz (R-TX) discussed in his Keynote Address at the Free State Foundation's recent Seventeenth Annual Policy Conference (video available here).

T-Mobile/UScellular Transaction Likely to Benefit Wireless 5G Consumers

On September 13, T-Mobile filed a public interest statement with the FCC in support of its proposed transaction with US Cellular. If approved, the T-Mobile/UScellular transaction likely would produce pro-competitive results. The merger would benefit UScellular subscribers by giving them access to a 5G mobile wireless network with faster speeds and higher data capacity. It also would enhance residential broadband competition by expanding consumer access in UScellular's service regions, especially in rural areas. On its face, the proposed combination does not appear to pose any significant competitive harm. The Commission should conduct a timely review of the T-Mobile/UScellular transaction and issue its decision within the agency’s 180-day shot clock.

The proposed T-Mobile/UScellular deal reportedly would result in T-Mobile acquiring UScellular's wireless operations, subscribers, and about 30% of its spectrum licenses for $4.4 billion. UScellular is a multi-regional wireless provider that serves about 4.5 million subscribers – or about 1% of the nation’s mobile wireless services market. Its subscribership has been declining in recent years. Strong competition from cable hybrid wireless mobile virtual network operators (MVNOs) Spectrum Mobile and Xfinity Mobile partly account for US Cellular's declines. Moreover, UScellular has lagged behind AT&T, T-Mobile, and Verizon – the three major nationwide mobile wireless providers in 5G network deployment.

Revenue reductions resulting from subscriber losses, as well as the burdens of servicing $2.9 billion in debts, are limiting its resources for future network investment. If UScellular were to continue operating as a standalone mobile provider, its competitiveness would probably diminish further.

T-Mobile's public interest statement presents a prima facie case that its proposed transaction with UScellular will bring public interest benefits that outweigh any potential competitive concerns. Today's dynamic wireless market provides the analytical context for the proposed T-Mobile/UScellular deal. As explained in the Free State Foundation’s June 2024 public comments to the FCC for its forthcoming 2024 Communications Marketplace Competition Report, there is effective competition among the mobile wireless segment of the broadband market. In 2022 and 2023, the three nationwide wireless providers significantly upgraded and expanded their 5G network coverage. Additionally, aspiring national provider EchoStar (which recently acquired DISH Network) announced in March of this year that its 5G network covers over 70% of the U.S. population. The large footprints of Xfinity Mobile and Spectrum Mobile also support competitive 5G wireless services to at least 16 million subscribers and counting.

Moreover, the T-Mobile/UScellular transaction is unlikely to reduce wireless competition. T-Mobile faces little challenge from UScellular due to its small market share, with a footprint that spans only about 10% of the nation's geographic territory. T-Mobile is the second-largest wireless provider, with nearly 126 million total subscriptions versus UScellular's 4.5 million. T-Mobile makes its pricing and service terms on a nationwide basis, and thus UScellular's presence in a given area is unlikely to impact T-Mobile's price offerings. According to the public interest statement, T-Mobile and UScellular do not have an overlapping competitive presence in only about 37% of the Cellular Marketing Areas (CMAs) that are implicated by the proposed transaction.* If the it is approved, most consumers would continue to have choices among nationwide providers T-Mobile, Verizon, and AT&T, and many consumers also would have choices among DISH Wireless and a cable wireless MVNO. 

Furthermore, T-Mobile's analysis indicates that the proposed acquisition of 30% of UScellular's spectrum portfolio would not trigger the FCC's spectrum screen analytical trigger in any cellular marketing area. This presumes that T-Mobile completes planned sales of certain spectrum licenses that it currently holds in the 800 MHz and 3.45 GHz bands. 

Under the terms of the proposed T-Mobile/UScellular transaction, UScellular subscribers would have the option of staying on their existing rate plans. T-Mobile estimates that at least some of UScellular's subscribers would experience a price decrease by changing to comparable plans offered by T-Mobile. If correct, and given existing competition in the market, the deal would not likely cause rates to increase for consumers. 

The transfer of spectrum licenses contemplated in the proposed T-Mobile/UScellular transaction triggers the FCC's review of the transaction under its public interest standard. The Commission's merger review process includes opportunity for public comments that could shed added light on the proposed deal. The agency will undertake its examination of the representations made in the public interest statement – including information redacted from public view – and it will more closely examine the potential effects in local markets. However, at this stage of the proceeding, the T-Mobile/UScellular transaction appears to be a strong candidate for approval. 

Importantly, the Commission should complete its transaction review within the agency's informal 180-day shot clock. Delays in completing reviews can accelerate subscriber losses in small providers and have other harmful impacts.

(*12/19/2024 - a correction has been made in this post to the percentage of CMAs in which the parties have an overlapping presence)

(*02/04/2025 - further edits have been made to more accurately refer to the transaction as an acquisition of assets and not a merger between the parties)

FSF President Randolph May Commends Bill to Reform FCC Merger Reviews

A March 9 feature article at Utahpolicy.org discusses Sen. Mike Lee's reintroduction of the One Agency Act in the 117th Congress. If the bill becomes law, it would consolidate agency merger reviews at the U.S. Department of Justice. Additionally, the bill would remove the authority of the FCC and state public utility commissions to conduct duplicative competitive analyses in reviewing mergers. 

Free State Foundation President Randolph May is quoted in the article. While FSF President May takes no position on the DOJ/FTC antitrust consolidation, he does commend the provisions relating to reforming the FCC's transaction review process:

The part of the One Agency Act that prevents the FCC and state public utility commissions from duplicating the Department of Justice's analysis of a transaction's competitive effects makes eminent sense. And the bill's limitations on the FCC's invocation of its vague "public interest" authority, which the agency often has abused by imposing a multitude of conditions unrelated to any impact resulting from the proposed transaction, would constitute a significant improvement. Together, these two aspects of Senator Lee's bill would constitute a meaningful reform of the review process applicable to transactions involving communications firms. 

The text of the One Agency Act is available here and Sen. Lee's press release for the bill (which also quotes FSF President May) is here.

Shutting Down the Bizarre Bazaar

For many years – you can make that almost two decades! – I have advocated that Congress reform the FCC’s transaction review process to constrain the agency’s discretion, to require it to act on proposals in a timelier fashion, and to reduce the current duplication of effort that exists between the FCC and the antitrust authorities. I have testified to this effect several times at congressional hearings. Here is my testimony before the House Communications and Technology Committee in July 2013.

But until Congress gets to work on a #CommActUpdate – which it should – it’s up to the FCC to exercise self-restraint so as to carry out its merger review responsibilities in a proper manner. The Commission’s recent action approving the CenturyLink - Level 3 merger presents an opportunity for comment to highlight briefly a salient point relating to past abuse of the review process.

It is common knowledge that, in the past, the Commission often has availed itself of the “opportunity” presented by the indeterminate nature of the “public interest” review standard to impose conditions unrelated to harms supposedly arising from the transaction. This usually has been accomplished by Commission officials engaging in an unseemly bargaining process in which parties to the transaction are advised to “volunteer” certain conditions if they wish to have the transaction approved. As I explained in a Legal Times column entitled, “Any Volunteers?”, published in 2000, the proffered conditions aren’t really “volunteered” in the sense in which the term normally is understood. Moreover, the resulting “regulation by condition” is bad policy because, among other reasons, similarly situated parties are treated in a disparate fashion.

Subsequently, in 2010, after observing more instances of “regulation by condition,” I called the process of extracting “volunteered” commitments, a “Bizarre Bazaar.”  I can think of worse names for it.

This past March, I returned to the subject once again in “A Proposal for Improving the FCC’s Merger Review Process.” There I urged the Commission to consider issuing a policy statement regarding transaction reviews to include at least these two fundamental elements:

·      A commitment to review proposed mergers in a timely fashion.

·       A commitment to refrain from imposing conditions on approvals of transactions unless they are narrowly tailored to address harms uniquely presented by the specific transaction.

This brings me back to the FCC’s approval of the CenturyLink – Level 3 transaction. As to timeliness, the FCC approved the transaction just a few days after the bell rang on the Commission’s 180-day shot. But unlike most timepieces, the shot clock stops and starts at the government’s discretion, so the reasons for the stops and starts are pertinent. Hopefully, in the dynamic, fast-changing communications marketplace, the Commission will strive to beat the shot clock substantially, not just run it out.

Regarding a commitment to refrain from imposing conditions unrelated to harms allegedly arising from the transaction, the Commission deserves credit for its handling of CenturyLink – Level 3. The Commission majority stated clearly that it would impose conditions only to address transaction-specific harms which are related to its responsibilities under the Communications Act and related statues. Given past history – the “Bizarre Bazaar” – this is important because it should offer some assurance to those who come before the agency in the future, or who are contemplating doing so, that they will not be subject to the vagaries of “regulation by condition.”

 After a careful and extensive economic analysis, the Commission did impose one transaction-specific condition to address potential competitive concerns in ten specific locations where it considered the merger might decrease competition and increase prices. Commissioner Mignon Clyburn dissented because she thought the Commission should not have credited potential competition to the extent that it did and, therefore, should have imposed substantially broader conditions. But, in essence, she was using the occasion to reargue her position that did not prevail in the Business Data Services proceeding.

So, I commend the current Commission for the emphasis placed on limiting the imposition of conditions to those directly related to transaction-specific harms. For shutting down the Bizarre Bazaar.

But here’s the final point: Congress needs to amend the Communications Act to embody that constraint in law so that it will be durable. And it should adopt other reforms such as requiring the Commission to render a final appealable order regarding proposed transactions within a definite time frame, absent a showing of good cause for exceeding the deadline. Then the conception of the agency’s proper role in reviewing proposed mergers will not be determined by what three of the five commissioners happen to think on any given day, or in any given administration.

*     *     *

Regarding Congress and the need to update the Communications Act, the new Free State Foundation book, #CommActUpdate - A Communications Act Fit for the Digital Age, Randolph May and Seth Cooper is now available on Amazon in paperback for $9.95 and on Kindle for $2.99! And it is available as an ebook for $2.99 from seven different bookstores here. Read more about the book here.

   

The FCC Should Reject CWA’s Job Protection Pleas, Again

Since the Federal Communications Commission opened its docket seeking comment on Frontier Communications’ application to acquire AT&T’s wireline business and statewide fiber network assets in Connecticut, only one comment objecting to the transaction has been filed. Communications Workers of America (“CWA”) argues that among other negative impacts, the transaction, if approved, could adversely affect employment levels and worker living standards. The Commission may consider the impact of the transaction on service quality, consumer access to service, and other factors when evaluating a merger proposal. But it is improper for the Commission to consider job loss and other employment related impacts during a transaction review, and job protection should not be imposed as a condition on transaction approval.

Under Section 214(a) and 310(d) of the Communications Act, the Commission must determine whether a transaction will serve the public interest, convenience, and necessity. FSF scholars have often commented on how the public interest standard, by virtue of its ambiguity, has been interpreted in an abusive way to justify the Commission’s unsavory practice of, in effect, “regulating by condition.” Yet even among the range of factors the Commission has included in its determination of whether a transaction is consistent with the “broad aims of the Communications Act,” whether and how a proposed transaction will affect employment practices is not a proper one.

CWA currently represents 2,900 workers who are employed by AT&T’s affiliate in Connecticut, and 3,800 employees at Frontier nationwide. CWA urges that the Commission should insist that AT&T and Frontier provide “detailed and granular employment data” and “assurances” that the transaction will not lead to any reduction in employment levels and workers’ living standards. CWA argues in its comments that the Commission has considered “whether a proposed transaction will lead to public interest harms with respect to employment practices” in the past and should do so again in reviewing Frontier and AT&T’s application.  

Notably, CWA only cites short statements from FCC Chairman Genachowski and a handful of Commissioners to support this argument; CWA does not point to any of the plentiful public interest standard jurisprudence available. Although Commission officials may have noted the impact of transactions on employment, the FCC’s statutory authority to review transaction proposals should not be construed to allow Commissioners to weigh employment as a factor in its determination, nor have courts interpreted the public interest standard to include such a consideration. And the FCC cannot, and should not, impose job protection conditions on the transaction, as CWA has requested for other transactions.

In its comments objecting to the T-Mobile/MetroPCS merger several years ago, CWA also argued that the Commission should consider the impact of the transaction on employment practices. CWA also requested that the Commission impose job protection conditions on the transaction. FSF President Randolph May responded to CWA’s arguments on the FSF blog: "[T]he FCC has no business abusing its merger review authority by conditioning the merger on adoption of the job protection plan put forward by the CWA. Regardless of whether the Commission has abused its authority this way in the past, such a condition is simply too far afield from any legitimate view of the Commission's exercise of its merger review responsibilities."

The Commission’s public interest authority may be broad, but not so broad as to include the management of the size and composition of company workforces. And the Commission’s authority to impose conditions that promote the public interest does not enable it to extract job protection conditions upon approval of a transaction. Doing so would be an abuse of its regulatory authority and would likely open the Commission to a barrage of requests for job protection plans in other contexts.

While it is unclear whether the Frontier-AT&T transaction will affect employment, and certainly no one wants to see jobs lost for any reason, job protection is just not within public interest purview.