Just in case you weren’t convinced from last week’s posts that the federal government uses various agencies as “Soft Gestapo” to target enemies, I have another piece to add about the FCC approval process of the Comcast/ Time Warner merger. Turns out you must donate millions of dollars to the right people in order to have your merger approved by the Justice Department. The Justice Department rejected AT&T’s proposal to buy T-mobile in a shockingly short 5 months, when even a rejection usually takes a year. So now we can see a clear example of the FCC—supposedly to clean up broadcasts from obscene material and crack down on free market corruption—being used as a tool to reward political cronies, and punish political enemies.
You know from Comcast buys-off Government to Kill Competition that Comcast’s CEO, Comcast’s VP, and Time Warner’s CEO are all big democratic donors, specifically giving and raising millions of dollars for Obama’s Presidential campaigns (in addition to Comcast VP hosting the President at his house and visiting the Oval Office, and Comcast CEO being golf buddies with Obama). According to a Forbes article, the employees of Comcast and Time Warner also lean heavily democratic with their political donations:
In 2012, Comcast employees donated $465K to the Democrat National Committee vs. $114K to the Republican National Committee and supported Obama over Republican Mitt Romney by nearly four to one. Time Warner donations were $442K Obama and $28K Romney.
On the other hand, the CEO of AT&T is an open advocate of the free market and gives mostly to Republicans, and the employees of AT&T also give 60% of political contributions to Republicans. Approval for mergers involve the FCC, but must also go through the Justice Department; it was the Justice Department and FCC chair who shot down the AT&T merger in such a short time frame. In contrast, this administration quickly approved a number of risky loans to alternative energy companies run by political donors (notably billionaire George Kaiser), including Solyndra and A123 who each promptly went bankrupt, losing taxpayers close to a billion dollars together. The AT&T T-mobile merger would have been of no such risk to taxpayers. In fact the merger was worth billions of dollars less than the merger of Comcast and Time Warner, and would not have garnered such a large market share.
And this is why big companies favor extensive regulation. Some people have in mind that the giant companies are hell-bent on opposing regulation in order to greedily exploit the free market. This could not be further from the truth. The biggest most corrupt companies LOVE regulation. Comcast certainly loves the regulation the FCC promotes because they can easily comply (or already met the requirement and wish to impose the same costs on competitors) where-as their small competitors will be disproportionately disadvantaged by the regulation. And why would the CEO of AT&T oppose regulation? Because he sees it for what it is: a bargaining chip of politicians who will demand political contributions in order to approve something that wouldn’t need to be approved by government in a free market, only by consumers.
Its time people wake up and realize the government is not protecting us by regulating Comcast and AT&T with the FCC and Justice Department. All it takes to skirt regulation or have the ire of government brought upon your business competitors is well placed political contributions. Mergers are the current topic, but this happens in every area of the market regulated by the federal government. So enough with this idea that we need to regulate in order to stop companies from becoming too big or monopolizing: Comcast now has upwards of 40% of the market cornered, because they have the government regulating the industry, not despite it. And AT&T’s business has taken a hit because they don’t play nice and pay off the right politicians. A prime example of the difference between crony capitalism, and the free market.