With the latest deadline in the Federal Communications Commission’s review fast approaching, several tech and venture capital companies have voiced their support for AT&T’s proposed merger with rival T-Mobile USA.
They include a coalition of tech companies, such as Facebook, Microsoft, Qualcomm, Research in Motion and Yahoo. They and other supporters of the deal say combining No. 2 wireless provider AT&T with No. 4 T-Mobile USA will provide a near-term solution to the spectrum crunch in many regions of the country.
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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“Consumer demand for wireless broadband is dramatically increasing and our wireless networks are struggling to keep pace with the demand,” the companies said in their letter. “Given the network capacity challenges, policymakers must give meaningful consideration to AT&T’s acquisition of T-Mobile as a means of addressing their near term wireless broadband capacity needs.”
Several venture capitalists also are backing the merger, again citing the need for a robust national wireless broadband network and faster, next-generation service, called 4G LTE.
“By combining the physical infrastructure and spectrum positions of the two companies, the merged entity will be able to accomplish what neither firm can do on its own: namely, deploying a 4G LTE broadband infrastructure to more than 97 percent of the United States population,” several venture capitalists including Promod Haque of Norwest Venture Partners and former VeriSign CEO Stratton Sclavos, who is now with the Radar Partners, wrote in their letter of support.
Legendary Silicon Valley venture capital firm Kleiner, Perkins, Caufield & Byers, which has helped fund such companies as Amazon.com and Google, sent its own letter of support for the merger that voiced similar views.
In a statement, AT&T CEO Randall Stephenson welcomed the support from Silicon Valley. “These are among the most innovative companies and investors in America, and they recognize the link between our merger with T-Mobile and continued innovation in mobile broadband,” Stephenson wrote.
The merger also is attracting support from a diverse array of other groups. The Montana AFL-CIO wrote the FCC last week saying the merger will benefit workers and consumers. “When considering a position on this acquisition, the MT AFL-CIO looked at whether it would be good for workers, customers, and the country as a whole. In this merger, we find winning outcomes for all three considerations,” the group said. Several national labor groups also back the deal.
In its Monday letter supporting the deal, the West Virginia Farm Bureau agreed. “Americans in rural or low-income areas -- which currently have less access to wireless technology -- should benefit the most from this consolidation,” the group wrote.
And several minority groups, including a coalition of 14 Hispanic groups, also have come out in favor of the merger, saying increasing the availability of wireless broadband will benefit minorities, who access the Internet on their mobile phones at much higher rates than white users.
Those who favor the merger have until Friday to submit a comment to the FCC on the proposed merger. Critics of the merger had until May 31 to file. Many say the merger will harm competition and drive up prices for consumers.
House Energy and Commerce Communications Subcommittee Chairman Greg Walden, R-Ore., discussed the merger during a speech Tuesday to the Oregon and Washington Telecommunications Associations. He said his panel would be holding a hearing on the merger in the next few months, but did not give a specific date.
Walden also said while it is too soon to judge the merits of the merger. He said his panel would examine how the deal promotes competition and innovation. In addition, he said he wants to ensure that any conditions placed on the merger are limited to mitigating possible risks from the deal and do not try to address bigger issues.
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