A big reason why The Heartland Institute argues for less government regulation of industry — especially in the digital economy — is because the choices individuals make in a free marketplace handle any “problems” faster and more fairly than any government agency. Another reason: The more stringent the regulatory state, the more “crony capitalism” you see.
A great example of that is coming out of the disputes over the AT&T/T-Mobile merger. Consumers are bound to see better and cheaper service from the deal, but telecom competitors (and the digital left) are not happy. And neither, it seems, is the California Public Utilities Commission (CPUC) — which appears to have conspired with Sprint to gin up opposition to the merger in public hearings this month.
According to a story last week in Politico, Sprint sent out text messages to its customers in California informing them of public CPUC hearings on the merger. The message read:
SprintFreeMsg: Public hearings on Proposed AT&T / T-Mobile merger July 21, 25, 27 in Culver City, San Diego, Fresno. More info at www.cpuc.ca.gov/merger
That’s understandable. Sprint is among the companies that could have a lot to lose if that merger goes through.
Let’s put it this way: Wendy’s would not be happy if the two biggest burger franchises in the country — McDonald’s and Burger King — were to join forces. Instead of being a close #3 in the fast food race, they’d turn into a very distant #2. So Wendy’s would likely oppose the merger — and would be smart to publicize hearings questioning the deal with every bag of food they handed out in the drive-thru window.
It’s the same thing for Sprint in the telecom market. They have every right to be worried. But what happened in California is very strange because Sprint apparently did not think to send out that message itself. The CPUC did — and it urged Sprint to send it out on the agency’s behalf.
Said a CPUC spokeswoman:
Doing the texts messages was one of the ways we thought would reach the exact audience we are trying to reach.
Hmmmm. Did the CPUC also ask AT&T or T-Mobile to send the same message out to their customers? Surely, the CPUC spokeswoman would have mentioned that if it were the case. Instead, appears that the CPUC is already picking a side — against the merger and for the interests of Sprint.
It would take more reporting to determine where this text-spamming idea came from. Did Sprint suggest to the CPUC it would send out the message? Or did the agency reach out to Sprint? Either way, this is yet another example of crony capitalism — the dangers of industry and government regulators dancing a little too close. Neither side should be doing the bidding of the other.
Now, in fairness, that message was neutral. It didn’t advocate for any particular viewpoint on the matter. It just let folks know that hearings were coming up to discuss the merger. And it’s not technically “spam,” either. The CAN-SPAM Act prevents unsolicited text messages from hitting one’s phone “unless they have an established business relationship with the called party or are otherwise exempt.”
So there’s nothing wrong with Sprint communicating the fact of open hearings to its California customers. But the nexus of this event, as I outlined above, still makes it smell awfully fishy.