Republican lawmakers wrote to federal regulators on Thursday to request briefings on the Justice Department’s decision to block AT&T’s merger with T-Mobile.
House Energy and Commerce Chairman Fred Upton, R-Mich., Communications Subcommittee Chairman Greg Walden, R-Ore., and Rep. Joe Barton, R-Texas, wrote to the Federal Communications Commission and the Justice Department to request bipartisan briefings for subcommittee staff.
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“Please be prepared to describe the process each agency used, including the extent to which each agency has been considering the impact on jobs and economic growth as well as other indicia of competition beyond the number of competitors and market share,” they wrote.
The Justice Department filed suit against AT&T’s $39 billion bid to buy T-Mobile last month on the grounds that it would reduce competition.
AT&T says the merger would create jobs through new investments in its network and through its pledge to bring 5,000 call center jobs back from overseas. But the Justice Department appears to think the merger would kill jobs, an argument it seems to tie to concerns over industry consolidation. The department’s exact rationale for its view is unclear since jobs are not discussed in its complaint against the merger.
However, Deputy Attorney General James Cole said when the DOJ announced the suit last month, “The view that this administration has is that through innovation and through competition, we create jobs.” He added that DOJ officials “see this as a move that will help protect jobs in the economy, not a move that is going in any way to reduce them.”
An FCC review is ongoing, but the agency is not expected to approve the merger while DOJ litigates.
The lawmakers also wanted to know how the regulators are thinking about conditions. "If your agencies are considering imposing conditions on the transaction, we would like your agency to confirm that it will only consider imposing conditions that are narrowly tailored to remedy transaction-specific harms,” they wrote.
Aggressive merger conditions have been a sticking point for GOP lawmakers who strongly criticized the FCC’s approach to the Comcast merger with NBC Universal, approved earlier this year with various regulatory add-ons. Walden, who says FCC reform is on his agenda this year, sees the FCC’s standards for reviewing mergers as “vague and susceptible to abuse.”
Members of the House subcommittee overseeing telecom have taken different approaches to the merger, depending on party affiliation. Walden has emphasized a need to prevent federal regulators from abusing the process and harming industry, while subcommittee ranking member Rep. Anna Eshoo, D-Calif., has raised serious concerns about potential anticompetitive impacts of the merger.
Their subcommittee was expected to hold a hearing on the merger this fall, but it’s unclear if that will occur now that the companies are in a more sensitive position, with the transaction headed to the courts at the same time the companies are expected to continue pushing for a settlement with the government.
This article appears in the September 9, 2011, edition of National Journal Daily PM Update.