AT&T CEO Randall Stephenson will face a panel of skeptical lawmakers on Thursday as he defends his company’s plan to buy rival T-Mobile.
On Wednesday, Reps. John Conyers, D-Mich., and Ed Markey, D-Mass., both called for federal regulators to block the merger.
House members will get their first crack at the mega-merger at Thursday’s hearing of the House Judiciary Intellectual Property, Competition, and the Internet Subcommittee. According to prepared testimony obtained by National Journal, Stephenson will largely repeat arguments he made before a Senate subcommittee earlier this month.
“This transaction is all about consumers,” Stephenson plans to say, before listing off expected benefits of the deal, including improving service quality, increasing competition, and increasing access to mobile broadband.
Possibly prompted by pointed questioning during his encounter with the Senate panel, Stephenson argues that T-Mobile isn’t a competitive threat to AT&T.
AT&T proposes a $39 billion takeover of T-Mobile USA. Here’s our take on its prospects for success as regulators, consumer groups and Congress weigh in.
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“The combination of AT&T and T-Mobile could not possibly derail the powerful forces of competition in one of the nation’s most competitive industries,” he says in his prepared testimony. “Moreover, T-Mobile does not exert strong competitive pressure on AT&T, and other providers already fill—or could easily move to fill—whatever competitive role T-Mobile occupies today.”
Rene Obermann, CEO of current T-Mobile owner Deutsche Telekom, plans to back Stephenson up, highlighting T-Mobile’s recent difficulties.
“T-Mobile has been caught in the middle of this dynamic marketplace and has had an increasingly difficult time competing,” he plans to say, according to prepared remarks. He says T-Mobile has been hemorrhaging customers and doesn’t have the spectrum resources to meet the coming demand for bandwidth.
Other witnesses at the hearing will take a dimmer view of the merger.
Rural Cellular Association President Steven K. Berry will testify that the merger, if approved, would cripple the business for smaller wireless carriers.
“For the first time, this horizontal merger would eliminate a national carrier from the competitive map,” he says in prepared remarks. “The transaction would not only diminish competition among the largest national providers, but also undermine the ability of rural and regional carriers to compete by making it more difficult—if not impossible—to secure roaming rights and to offer cutting-edge, interoperable handsets.”
Congress should look carefully at how the $39 billion merger would affect consumers, Consumers Union policy counsel Parul Desai says in her planned testimony.
“There is a great deal of data and evidence to suggest that this transaction will lead to a highly concentrated market, which will likely lead to higher prices and less choice for consumers,” she plans to say.
The panel will also hear testimony from George Mason law professor Joshua Wright and Howard University law professor Andrew Gavil.
AT&T has hired more than 70 lawyers and consultants in addition to a string of lobbyists to help shepherd the $39 billion deal through the approval process. Congress has no direct say over the merger but can exert political pressure on both federal agencies and the companies involved.
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