Mellody: On the surface, it may appear so, but throttling is not the whole story. Someone I spoke with in the industry told me he views this as the FCC flexing its muscles. In the last year, we have seen the telecom industry undergo a huge round of consolidation, with mergers or attempted mergers being announced every few months. As a result, the FCC is going to take advantage of its position to keep companies in line and make sure these merger moves are not impacting consumers in a negative way.
What does this mean for consumers? After all, we all have phones!
Mellody: The FCC obviously wants to make sure that the consolidation in the industry does not have negative impact on the little guys. I think we can expect that the FCC and the Justice Department will be demanding more concessions and assurances before these deals are approved, and they will be more thorough in their oversight going forward. And companies are going to be obliged to adhere to them. The biggest fear of the telecom industry is that broadband will get classified as a utility and regulators will impose price caps, which would cut into their profits and get rid of any incentive to spend money on upgrades, which would in turn be bad for consumers. Overall, the FCC is trying to protect consumers in this period of consolidation while striking a balance with the industry’s interests.
Mellody is President of Ariel Investments, a Chicago-based money management firm that serves individual investors and retirement plans through its no-load mutual funds and separate accounts. Additionally, she is a regular financial contributor and analyst for CBS news and CBS.com.
Money Mondays: Data Throttling And How It Impacts You was originally published on blackamericaweb.com