Sen. Al Franken, D-Minn., on Tuesday called on regulators to block AT&T’s proposed purchase of T-Mobile USA, saying it will result in less competition in the wireless market, job losses and higher prices for consumers.
In a letter to Federal Communications Commission Chairman Julius Genachowski and Attorney General Eric Holder, Franken argued that allowing AT&T, the No. 2 U.S. wireless provider, to acquire the nation’s fourth-biggest provider, T-Mobile USA, would essentially leave a duopoly in the wireless market.
If the deal is approved, AT&T would leapfrog Verizon Wireless to become the nation’s top wireless provider, giving both of those firms control of a combined 80 percent of the market, Franken noted, echoing a statistic repeatedly cited by other critics of the deal. Sprint, which opposes the merger, would remain in a distant third place.
“I am convinced that this type of horizontal consolidation does not serve the public interest,” wrote Franken, who sits on the Senate Judiciary Committee. “Consumers, businesses, regional wireless service providers, and handset manufacturers all depend on a competitive wireless market. The destruction of that competition would have grave repercussions for the economy as a whole and cannot be ameliorated by the application of conditions. I urge you to deny this proposal in its entirety.”
Lat week, Senate Judiciary Antitrust Subcommittee Chairman Herb Kohl, D-Wis., also called for the merger to be blocked. Franken’s opposition to the deal is not surprising. He voiced strong concerns about the deal during a Senate Judiciary hearing in May on the merger.
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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AT&T says it isn't worried.
"It is very clear that the few opposing voices are far outweighed by the enormous depth and breadth of support we are seeing," said Jim Cicconi, AT&T senior executive vice president, in a statement.
"Never before have 26 governors urged approval of a merger as in the vital interests of their states. They've been joined by 72 mayors, 77 Democratic members of the U.S. House of Representatives, most of the major civil-rights organizations in America, much of the high tech community, virtually all of the organized labor movement, and a growing number of respected organizations representing farmers and rural communities," he said.
AT&T has argued that the proposed merger will allow it reach more Americans faster with its next-generation wireless broadband service than it could on its own. While losing the support of a Senate Democrat, AT&T gained a new Democratic supporter in the House.
Rep. Mike Thompson, D-Calif., called on Holder and Genachowski last week to approve the merger, citing AT&T’s claims that it will allow the company to expand its high-speed broadband service to 97 percent of the U.S. population.
“Once approved this merger will allow AT&T to significantly expand and strengthen its broadband network, better serving constituents in northern California and nationwide,” Thompson wrote in a letter last week.
Last month, more than 70 House Democrats wrote federal regulators voicing support for the benefits of the merger, although they did not explicitly call for its approval.