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Groups Formally Petition FCC to Block Wireless Merger Groups Formally Petition FCC to Block Wireless Merger

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Technology / TECHNOLOGY

Groups Formally Petition FCC to Block Wireless Merger

Critics had a chance to formally tee off on the proposed AT&T/T-Mobile merger.(Alex Wong, Getty Images)

May 31, 2011

Depending on whose filing you read, AT&T’s proposed merger with T-Mobile will either bring broadband to the masses or create a duopoly that stifles competition.

Tuesday was the deadline for opponents of the $39 billion merger to say why in formal petitions at the Federal Communications Commission. Among the more prominent opponents was Sprint, whose 377-page filing says the FCC has “a stark choice”.

“It can reject AT&T’s bid to take over T-Mobile and extend the last two decades of robust competition in the wireless industry—competition that has promoted economic growth and advanced U.S. global leadership in mobile communications. Or the commission can approve the takeover and let the wireless industry regress inexorably toward a 1980s-style duopoly,” Sprint wrote.

 

Groups representing minorities, communications-union workers, and mobile-application developers beg to differ, saying the deal will bring broadband to more people.


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.

More coverage »

Merger supporters cite a new report by the Economic Policy Institute that finds that AT&T's promised investment in developing broadband networks could create up to 96,000 jobs. And AT&T says the new spectrum would help it build those broadband networks in rural and other underserved areas.

Sprint asserts that if approved, the merger would only extend AT&T coverage by less than 1 percent of the U.S. population while stifling competition by removing T-Mobile from the market and creating a duopoly.

By combining with T-Mobile, AT&T would gain “unprecedented nationwide control over spectrum” used for mobile services, Sprint’s petition says.

AT&T has said from the day it announced the deal that one benefit of a combined company would be a rollout of more service to the United States.

“Our two companies have very complementary assets, which means that combining them will create much more service—enhancing network capacity—the equivalent of new spectrum, than the two companies could have done operating separately,” AT&T CEO Randall Stephenson told the House Judiciary Intellectual Property, Competition, and the Internet Subcommittee on Thursday.

Sprint and other critics say this could be done with AT&T’s existing spectrum holdings, and for much less money than the merger will cost.

In a blog post Tuesday, AT&T vice president Jim Cicconi said the outpouring of support for the merger has been "massive and unprecedented."

"In contrast, the opposition is unsurprising, underwhelming, and unpersuasive," he wrote. "This is especially true of opposition from some of our wireless industry competitors who are confusing the public interest with their own particular corporate interest."

A range of advocacy groups including Free Press and Media Access Project said that if it is allowed to buy T-Mobile, AT&T won’t be forced to innovate or compete as much.

“In particular, prices will likely rise, consumers will suffer the loss of a maverick competitor in the marketplace, and AT&T will avoid infrastructure investments it would otherwise make,” according to Free Press’s petition.

AT&T and T-Mobile’s owner Deutsche Telekom will have until June 10th to respond to the petitions, after which opponents have until June 20th to file their responses.

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