AT&T/T-Mobile Deal Gains Momentum from U.S. States
July 28, 2011 10:02 PM
AT&T is receiving support from one U.S. state regulator and 11 state attorneys general who are for the merger
AT&T has been working to acquire Deutsche Telekom AG's T-Mobile USA in a
$39 billion deal
, but the U.S. Senate's antitrust committee recently expressed doubts in regards to the merger. Now, AT&T is receiving support on the matter from one U.S. state regulator and 11 state attorneys general who are for the merger.
Senator Herb Kohl (D-Wisc.), chairman of the antitrust committee, as well as Representative Anna Eshoo (D-Calif., 14th District), chairwoman of the House Energy and Commerce Communications and Technology Subcommittee, Congressman Edward Markey (D-Mass., 7th District), and Rep. John Conyers (D-Mich., 14th District) are among those opposing the AT&T/T-Mobile merger. They openly expressed their opinions in a letter to the Department of Justice (DOP) and the Federal Communications Commission (FCC) saying that
such a merger would kill competition
and hike prices for customers.
"We believe that AT&T's acquisition of T-Mobile would be a troubling backward step in federal public policy -- a retrenchment from nearly two decades of promoting competition and open markets to acceptance of a duopoly in the wireless marketplace," they wrote. "Such industry consolidation could reduce competition and increase consumer costs at a time our country can least afford it."
AT&T responded to the U.S. Senate committee, saying that these opinions are "inconsistent with antitrust law, is shared by few others, and ignores the many positive benefits and numerous supporters of the transaction." AT&T also mentioned that the merger would help it expand a quicker service to more people.
Now, it looks like AT&T has
acquired more supporters
to help push this merger along. The Louisiana Public Service Commission, which regulates transportation and public utilities in the state, voted 4-1 to approve the merger. In addition, another 11 state attorneys general wrote a letter to the DOP and FCC asking for merger-specific conditions that protect competition as well as public interest, yet doesn't delay the merger.
The 11 state attorneys general supporting the merger are Arkansas, Alabama, Georgia, Kentucky, Utah, Mississippi, Michigan, North Dakota, South Dakota, West Virginia and Wyoming.
"Their call for federal regulators to expeditiously review and
approve the merger
further builds on our unprecedented nationwide support from federal, state and local elected officials, national unions, non-profit organizations and high-tech and venture capital firms," said Wayne Watts, AT&T's senior executive vice president and general counsel.
If the merger were to go through, 80 percent of the U.S. wireless market would be consumed by two companies -- Verizon Wireless and AT&T/T-Mobile. Verizon has not mentioned whether it is for or against the merger, but chief executive Dan Mead has said that he is "not concerned" with it. Analysts believe Verizon could benefit from the merger by picking up subscribers during the potentially frustrating period of transition during the merging of both companies.
Sprint, on the other hand, has made its opinion clear -- it is against the merger mainly for competitive reasons, and has also said that bring both companies together will "stifle innovation" in the wireless market.
Ultimately, the choice is up to the Justice Department, which will conduct an antitrust review, and the FCC, which will decide if the merge is best for the public.
"The whole principle [of censorship] is wrong. It's like demanding that grown men live on skim milk because the baby can't have steak." -- Robert Heinlein
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