FCC's Pai Calls AT&T-DirecTV Conditions 'Forced Tribute'

Commissioner Ajit Pai of the Federal Communications Commission outlined his partial dissent from the AT&T-DirecTV merger approval on July 27 with a lengthy statement. Commissioner Pai approved the underlying merger, as did all the commissioners. But he dissented from the "17 pages of conditions" put on the deal.

Commissioner Pai has long argued against "regulating by condition" -- applying conditions that serve a particular regulatory agenda but are not merger-specific -- and suggested the FCC's demands on the deal were not supported and constituted a regulator "wish list" that had nothing to do with deal at hand. "These conditions are the forced tribute that the company must offer to mollify the Capitol," he said. In fact, Commissioner Pai said that the deal needed no conditions, and pointed to the Justice Department approval of the deal as not threatening competition. While Commissioner Mignon Clyburn praised the condition mandating high-speed, low-cost broadband to low-income households, Commissioner Pai saw it very differently. "When the Commission instructs a regulated entity that it must offer a particular service for no more than a particular price, there is a name for that: It is called rate regulation." He also says the FCC condition preventing the combined company from discriminating against unaffiliated over-the-top providers is not justified. In fact, he says, the evidence suggests the opposite, that any attempt to hamper broadband customers access to OTT providers would hurt the company, not help it.