UPDATED: AT&T Offers FCC More Data on Proposed Merger
UPDATE 8:17 p.m.: AT&T filed an engineering and economic analysis with the FCC showing the impact of the merger in 15 markets, including Washington D.C., on network capacity. The filing says the "proposed transaction will relieve significant capacity constraints faced by both companies and lead to improved service quality and expanded output of wireless service, among other public benefits."
But AT&T has redacted much of the filing.
Vonya McCann, the top Washington executive at Sprint, reacted in a statement by downplaying the credibility of the report: AT&T's "latest model, clearly constructed with predetermined results in mind, does nothing to change the negative consequences of the takeover for consumers in the form of higher prices, reduced innovation and decreased investment," she said.
Original post: AT&T is expected to submit a filing to the Federal Communications Commission on Monday with a technical explanation on how combining its network with T-Mobile's will create new capacity, a key argument it has made in advocating for the merger.
AT&T argues that merging the two companies' cell networks will create new capacity for smart phones and tablets just as networks are under increasing strain.
The FCC stopped its "shot clock" on reviewing the merger--the informal timer that's meant to ensure a speedy review process--when it requested this data. Opponents of the merger quickly crowed that this meant the deal had hit a roadblock.
"It is clear that AT&T's submission of a new justification for taking over T-Mobile is exactly like the coach of a losing team calling time out so he can work the referees. While the Federal Communications Commission stops its merger review process to examine the new plan, AT&T will use the time to spend more millions of dollars lobbying federal, state and local officials and recruiting non-governmental groups to support what is clearly a failing action," Public Knowledge President Gigi Sohn said in a statement.
AT&T says that it does not think that pausing the shot clock will delay the merger review, which is expected to move into next year. The company framed the new filing as additional data requested by the FCC rather than a new line of argument.
"AT&T has developed additional economic evidence that further confirms the tremendous efficiencies and consumer benefits resulting from this transaction. Because this information, which we will submit next week, is detailed, we are not surprised that the FCC will take the time it needs to thoroughly understand our submission. We do not expect this will adversely impact the timeframe for approval of our transaction," an AT&T spokesman said last week.
When the FCC requested the information last week, it said the company had "developed new models upon which" it is basing its merger arguments.
"Indeed, AT&T is now expressly relying on these models to bolster its arguments concerning the size of the efficiencies made possible by the merger as weighed against the potential anti-competitive effects," the FCC said.
AT&T also submitted filings to the FCC on Friday, again at the agency's request. One filing aimed to beat back arguments that the merger will kill innovation in the handset market. The other one reinforced AT&T's view view that competition in the wireless market should be reviewed on a local basis--where various companies offer service--rather than a national basis, where just four companies compete, including T-Mobile
The merger is under simultaneous reviews at the FCC and the Justice Department.