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Congress

Klobuchar Questions AT&T/T-Mobile Merger

May 6, 2011

One of the senators who could have a big say in the proposed AT&T/T-Mobile merger wrote the companies on Friday, asking the company to explain how the deal will help consumers.

"I remain concerned that the merger will lead to fewer choices, higher prices, and reduced services for wireless consumers," Sen. Amy Klobuchar, D-Minn., wrote in a letter to the CEOs of AT&T and T-Mobile.

The CEOs of both companies will testify next week to a subcommittee of the Senate Judiciary Committee, which will check on antitrust implications of the merger through its oversight of the Department of Justice.

AT&T has painted the proposed $39 billion merger as a boon for consumers and a way to expand broadband service to virtually all of the United States.

"As you know, the major wireless providers have resisted my efforts to adopt meaningful pro-consumer measures in the industry, arguing instead that competition among providers would inevitably yield consumer reforms," Klobuchar wrote.

"If AT&T's purchase is approved, however, AT&T and Verizon would control approximately 75 percent of the entire wireless market - effectively creating a duopoly and diminishing the possibility that the industry will act on its own to institute pro-consumer practices."

Klobuchar also sits on the Senate Commerce Committee, which oversees the Federal Communications Commission, which, along with DoJ, must approve the merger.
"How will you ensure that the proposed transaction will not lead to higher prices for consumers?" Klobuchar asks in her letter.

"What impact will decreased competition in the wireless industry have on practices that impact consumers such as cell phone exclusivity, early termination fees, and bill shock?"

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