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,...
At the request of the Federal Communications Commission, AT&T Inc. has filed a new engineering and economic analysis to justify its proposed $39 billion acquisition of T-Mobile USA. The analysis, submitted to the FCC late July 25, focuses on the pricing impacts of the deal and the likely efficiencies of the companies' combined operations in 15 U.S. markets.
Overall, AT&T predicts that the “proposed transaction will relieve significant capacity constraints faced by both companies and lead to improved service quality and expanded output of wireless service, among other public benefits.” In each market, AT&T says, the merger simulations project that “industry output will rise and average price adjusted for quality will fall as a result of the transaction.”
Much of the actual data AT&T filed is listed as confidential, and parts of the cover letter accompanying the new filing are also redacted.
In a statement released late June 25, Vonya McCann, a senior vice president at rival Sprint Nextel Corp., the chief opponent of AT&T's bid to take over T-Mobile, said AT&T's model was “clearly constructed with predetermined results in mind,” and does nothing to change the negative consequences of the takeover for consumers in the form of “higher prices, reduced innovation and decreased investment.”
AT&T's filing of the documents marks a critical juncture in the FCC's review process. The FCC's Wireless Telecommunications Bureau had halted its “shot clock” on reviewing the merger until the models were filed and parties have a chance to review and comment on them.
“Despite suggesting that parties needed to make all arguments in their initial filings with the agency, the FCC has given AT&T this second chance to expand on its earlier rationales regarding supposed spectrum efficiencies and pricing effects of the transaction,” the public-interest group Free Press said in a statement.
Free Press said it will need more time to review and analyze the new arguments contained in AT&T's latest filing.
Separately July 26, Sen. Al Franken (D-Minn.) urged federal regulators to reject the merger.
In a 24-page letter to Attorney General Eric Holder and Federal Communications Commission Chairman Julius Genachowski, Franken said that based on his analysis, the merger would result in less competition and higher prices for consumers, even with conditions. Following a similar letter by Sen. Herb Kohl (D-Wis.), chairman of the Judiciary Committee's antitrust subcommittee, Franken said the deal would create an “entrenched duopoly in the wireless industry.”
“It would concentrate enormous power over the entire telecommunications sector in the hands of only two companies and it would incentivize AT&T and Verizon to coordinate prices to the detriment of consumers,” Franken wrote. “This transaction is not in the public interest. If approved, it would result in greatly reduced competition, the potential loss of thousands of jobs, higher consumer prices, and less innovation in technology.”
The deal would vault AT&T past Verizon to become the nation's largest wireless carrier and give just two companies, AT&T and Verizon, 80 percent control of the U.S. market for wireless services, with AT&T and T-Mobile serving a combined 130 million users nationwide and Verizon serving 96 million. Sprint, meanwhile, ended calendar year 2010 with 50 million subscribers.
By Paul Barbagallo
For AT&T's redacted filings, visit http://op.bna.com/der.nsf/r?Open=rtar-8k5pbm . For Franken's letter, visit http://franken.senate.gov/files/letter/110726_Letter_DOJ_FCC_ATT_TMobile_Merger.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 firstname.lastname@example.org.
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 email@example.com.
Put me on standing order
Notify me when new releases are available (no standing order will be created)