Keep up with the latest developments and legal issues in the telecommunications and emerging technology sectors, with exclusive access to a comprehensive collection of telecommunications law news,...
The Federal Communications Commission's decision to release a staff report detailing objections to AT&T Inc.’s proposed plan to buy wireless carrier T-Mobile is “troubling,” particularly in light of the fact that the merger application has been withdrawn and dismissed, AT&T said Nov. 29.
“The FCC has recognized that it is required by its own rules to dismiss our merger application,” Jim Cicconi, AT&T senior executive vice president of external and legislative affairs, said in a statement. The release of the “preliminary” report has “no force or effect under law,” he said, “which raises questions as to why the FCC would choose to release it.”
The 100-plus page report found that the proposed combination—which the companies are still pursuing—would result in higher prices and reduced competition. It also found fault with the models the companies used to show the potential benefits of the combination.
The report is “simply a staff draft that raises questions of fact that were to be addressed in an administrative hearing, a hearing which will not now take place,” Cicconi said. It was also released before the company had a chance to review it and “rebut its claims,” he said.
“AT&T attempted to forestall release of the staff's detailed findings of fact by pulling its application. The public is entitled to know how its money was spent, and to know what the FCC staff concluded.”
Andrew Jay Schwartzman Media Access Project
The report's conclusion states that “significant harms to competition are likely to result” from the merger, “primarily in the form of increased prices for consumers, reduced incentives for innovation, and decreased consumer choice.”
Among the report's findings:
• The merger would raise prices in major markets in 2012, 2013, 2014, and 2015, increasing New York-area rates as much as 8.3 percent next year.
• Many of the cost savings the companies said the merger would produce, such as those resulting from the firing of T-Mobile customer service representatives and facility maintenance personnel, “might be the result of lowering the quality of services to consumers.”
• The companies failed to show that the combination would result in a wider expansion of broadband access than would otherwise occur.
The Media Access Project, a public interest law firm that opposes the merger, praised the FCC for releasing the report. “The American public paid for scores of FCC employees to work, often around the clock, for nine months investigating the proposed AT&T-T-Mobile deal,” Andrew Jay Schwartzman, the firm's senior vice president and policy director, said in a Nov. 29 statement. “AT&T attempted to forestall release of the staff's detailed findings of fact by pulling its application. The public is entitled to know how its money was spent, and to know what the FCC staff concluded.”
AT&T and T-Mobile's owner, Deutsche Telekom withdrew without prejudice their pending application to the FCC after the commission said it would seek a rare administrative hearing to further examine the $39 billion buyout proposal. The commission approved the request Nov. 29. The proposed combination still faces antitrust suits by the Department of Justice and several state attorneys general, as well as regulators in California and industry opponents.
AT&T officials could not be reached for comment Nov. 30.
By Nora Macaluso
The FCC staff report is available at http://transition.fcc.gov/transaction/ATT-TMO-redacted-PDF-final.pdf .
All Bloomberg BNA treatises are available on standing order, which ensures you will always receive the most current edition of the book or supplement of the title you have ordered from Bloomberg BNA’s book division. As soon as a new supplement or edition is published (usually annually) for a title you’ve previously purchased and requested to be placed on standing order, we’ll ship it to you to review for 30 days without any obligation. During this period, you can either (a) honor the invoice and receive a 5% discount (in addition to any other discounts you may qualify for) off the then-current price of the update, plus shipping and handling or (b) return the book(s), in which case, your invoice will be cancelled upon receipt of the book(s). Call us for a prepaid UPS label for your return. It’s as simple and easy as that. Most importantly, standing orders mean you will never have to worry about the timeliness of the information you’re relying on. And, you may discontinue standing orders at any time by contacting us at 1.800.960.1220 or by sending an email to email@example.com.
Put me on standing order at a 5% discount off list price of all future updates, in addition to any other discounts I may quality for. (Returnable within 30 days.)
Notify me when updates are available (No standing order will be created).
This Bloomberg BNA report is available on standing order, which ensures you will all receive the latest edition. This report is updated annually and we will send you the latest edition once it has been published. By signing up for standing order you will never have to worry about the timeliness of the information you need. And, you may discontinue standing orders at any time by contacting us at 1.800.372.1033, option 5, or by sending us an email to firstname.lastname@example.org.
Put me on standing order
Notify me when new releases are available (no standing order will be created)