Industry consolidation has been a dominant factor overhanging how the wireless industry is regulated, especially on transactions policy. The FCC under President Barack Obama's appointees repeatedly has drawn a clear line at four national wireless carriers -- AT&T, Sprint, T-Mobile and Verizon. Industry observers disagree whether that makes sense in the current market.

Midsized telco wireline system acquisitions have produced broadband deployment and sharpened the landline consumer focus in affected states, telcos and interested parties said. Frontier Communications' takeover of Verizon (and AT&T) systems and CenturyLink’s takeover of Qwest generally receive good marks from state regulators, consumer advocates and others for completing difficult transitions and fulfilling most service obligations. But it’s not clear if FairPoint has recovered after choking on Verizon New England systems that increased its size sixfold; there is concern about Frontier’s pending acquisition of Verizon systems in California, Florida and Texas; and the sustainability of wireline telco business plans is in question.

States, many of which have never been very involved with telecom mergers and acquisitions, are losing what little authority they do have, experts said. They said that's bad for all stakeholders other than telcos. The state role always has been about documenting issues that could arise from an acquisition, because if the decision is left to only the FCC, harm unknown to federal officials could come to consumers, they said. Even in those states that still have a tough review process -- California and New York especially -- that authority doesn’t apply to all kinds of transactions, only to those in parts of the industry that the state commissions regulate.

CenturyLink's takeover of Qwest, with a smaller telco buying the Bell serving much of the western U.S., worked out fairly well for consumers, we found. The same was true with broadband deployment after other deals (see 1508140026). But FairPoint's purchase of Verizon's wireline systems in three New England states bedeviled consumers, and the company still seems to be struggling.

The broadcast TV industry doesn’t have to guess whether it’s moving toward consolidation. With last week's release of the FCC incentive auction procedures public notice, TV licensees even have a firm timeline for how it's going to happen. While it’s not clear where participation will fall on the continuum between the FCC’s largest Greenhill auction book projections and the most gloomy broadcaster predictions, most industry observers said some stations will be going dark and selling their spectrum and some portion of existing low-power TV (LPTV) and translators could be displaced. Some said that may hurt diversity -- and consumers' choice of programming available for free for those owning a TV and over-air antenna.

Recent cyberattacks and data breaches against federal agencies and the private sector have prompted the communications sector and other industries to significantly increase their focus on cybersecurity as a factor when considering buying another company, industry lawyers and consultants said in interviews. The push to give the private sector the leading role in driving sectorwide improvements in cybersecurity, as evidenced in the development of the National Institute of Standards and Technology’s Cybersecurity Framework, means federal agencies are not closely monitoring cybersecurity as a main factor in deal reviews, stakeholders said.

Industry consolidation has been underway for decades and its challenges for the communications bar are nothing new, communications industry lawyers said. Law firms face steady pressure to keep the rates they charge low and, as companies expand, many take routine matters "in-house," the attorneys said. But the attorneys also said technological evolution, including the explosion of wireless, has meant new areas of practice and new clients seeking representation.

Service glitches, billing errors and product changes are all but assured as multichannel video programming distributors (MVPDs) digest a record spree of mergers and acquisitions, many experts said. Some said already-low customer satisfaction for broadband and pay-TV service will worsen during integration of M&A worth about $166 billion. That includes AT&T's now-completed (see 1507240055) takeover of DirecTV, Charter Communications' planned buys of Time Warner Cable and of Bright House Networks, and Altice buying control of Suddenlink. At stake for broadband and video subscribers of these and other ISPs and MVPDs is whether their experiences ever improve from levels that some research finds are lower than any other U.S. industry.

A clause about the sale or transfer of data in the event of a merger, acquisition or bankruptcy should be included in every company’s privacy policy, lawyers and other experts said in interviews. Data often is a firm's most valuable asset, across online and more traditional industries, said International Association of Privacy Professionals (IAPP) Vice President-Research and Education Omer Tene. A privacy policy is a legally binding document and companies need to be aware of what their privacy policy says and how it restricts their business, said CEO Rebecca Herold of privacy consultant The Privacy Professor.

As telecom consolidation proposals abound, one constant presence is lawmakers on Capitol Hill ready to scrutinize proposed mergers and acquisitions, despite lacking authority to approve or deny. One House member and former antitrust staffers told us of the balance between Judiciary committee members taking the lead in reviewing deals and those on Commerce, who sometimes also have an interest in proposed deals. Personality of individual lawmakers was seen as one highly influential factor in this relatively bipartisan oversight environment where little has changed institutionally, despite much M&A activity in recent years.