The Government Says No To Your iPhone Calls Going Through
Gordon Crovitz writes at the WSJ:

Today's AT&T, a spinoff from the original, needs more spectrum to catch up with market leader Verizon, also a Ma Bell descendant, to support iPhones, Androids and other devices that feature video and sophisticated apps. It wants to buy T-Mobile, a division of a German company, which doesn't have the resources to compete in the United States on its own. But the FCC decided to apply antitrust theory from the industrial era and claims to know better than wireless companies how they should operate their businesses.

AT&T's proposed acquisition is best understood as a private-sector solution to a government-created problem. The FCC has not been able to get Congress to approve auctions to reallocate spectrum to wireless from less valuable uses. AT&T wants T-Mobile's bandwidth so it can extend the latest fourth-generation network to 97% of the country from 80% and improve its spotty service in congested areas.

Under laws dating to the 1920s, the FCC gets to decide if a merger is in the "public interest," a vague standard for top-down decision making. Government is the last institution in this era of fast technological innovation to act as if it has the information and power to dictate how change happens.

The FCC said the planned $39 billion merger between the second- and fourth-largest wireless providers would "enhance market power." This is true, but not the same as harming competition.

The wireless market is different from, say, the steel industry circa 1970: Demand for wireless has skyrocketed, but prices have fallen. Consumers have more choices in mobile-phone plans, but the industry has consolidated. In network-based technologies like telecommunications, the key is using spectrum efficiently to meet the demands of consumers for new services, which puts a premium on scale.

..."What is really galling about the staff report--and, frankly, the basic posture of the agency--is that its criticisms really boil down to one thing: 'We believe there is another way to accomplish something like what AT&T wants to do here, and we'd prefer they do it another way,'" wrote Geoffrey Manne of the International Center for Law and Economics on the TechLiberation blog. "This is central planning at its most repugnant."