The Federal Communications Commission asked AT&T on Wednesday for more information on its proposed merger with T-Mobile, homing in on AT&T’s pledge to significantly expand its network if regulators approve the deal.
The FCC’s senior counsel to the chairman for transactions, Renata Hesse, wrote AT&T asking for more information about the company’s pledge to make advanced wireless Internet available to 97 percent of Americans if the mega-deal is green-lighted. The build-out pledge is the centerpiece in AT&T’s argument that the deal is in the public interest, a standard the FCC uses to evaluate mergers.
AT&T says that without the merger, there is no business case to build out and expand its network to the same degree. Hesse asked for AT&T to send “any documents or analyses explaining why the changes in cost, revenue, and/or profitability are likely to be large enough to change the overall business case for the additional deployment.”
The public-interest pledge has been a subject of controversy this month.
Merger opponent Free Press wrote to lawmakers—citing AT&T merger documents filed in August at the commission—arguing that AT&T can fulfill the pledge by spending $3.8 billion on its network.
“Overall, the scale and scope of the larger combined wireless business will permit the additional capital investment to be spread over a larger revenue base than would be the case absent the merger,” AT&T told the commission in an August filing. An AT&T spokesman said data requests from the FCC “are to be expected.”
“We look forward to providing the commission with this additional information, which will further confirm that we would not be able to deliver 4G LTE to 55 million more Americans without our merger with T-Mobile,” he said.
The Justice Department and the FCC are studying the merger and are expected to continue their reviews into next year.