California bill would go easy on telecom M&A

A California state Senate bill that seeks to reduce the amount of regulatory oversight faced by telecom service provider mergers is gaining steam. The legislation, which already has received support from one state Senate committee and is working its way through other committees, would streamline the merger approval process in California. It is clear that supporters of the bill fall into the traditional camp of people who believe telecom carrier mergers equal better prices and choices for consumers, but they also seem not to want to weigh down merging companies with conditions and costly red tape that would hamper their operations.

Many other people, of course, believe that mergers lead to higher consumer prices and less choice, but so far that thinking is not prevailing. It is unclear how such a bill would encourage more merger activity in California. AT&T already rules in California, but would a regulatory fast track be enough for Verizon to suddenly bid to buy regional telcos like SureWest Communications, or would it drive SureWest to merge with everyone else its size and smaller? Neither seems likely.

For more:
- see this report in The Los Angeles Times