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AT&T fires back at FCC staff report on T-Mobile deal

Grant Gross | Dec. 2, 2011
The U.S. Federal Communications Commission has invited questions about its impartiality with a staff report laying out concerns about AT&T's proposed acquisition of rival mobile carrier T-Mobile USA, AT&T said Thursday.

"This notion -- that government spending on broadband deployment creates jobs and economic growth, but private investment does not -- makes no sense," he said. "Conversely, if the FCC had applied to its own broadband fund the same analysis it used for our merger-related investments, the result would be similar -- zero new broadband, zero jobs, zero growth."

The FCC staff report concluded that AT&T would roll out LTE service to close to the same number of people as it promised it would after the merger, largely due to AT&T's competition with Verizon Wireless and its expanding 4G network. The staff report suggested, therefore, that any job gains due to an expansion of AT&T's network could not be directly attributed to the merger.

The merger itself would lead to "massive" layoffs as AT&T eliminated duplicative workers, FCC staff have said.

Opponents of the merger defended the FCC. "The FCC staff report explains in meticulous detail why AT&T's claims on every issue were simply not credible," said Harold Feld, legal director of Public Knowledge. "The staff went into exhaustive analysis of AT&T's economic models, engineering plans, financial data and public statements to come up with its conclusion that the takeover is not in the public interest."

The FCC "went out of its way" to give AT&T opportunities to make its case, Feld added. "It is time for AT&T to move on."

AT&T's rebuttal of the staff report ignores the impact of the merger on the larger mobile marketplace, said Jeff Kagan, an independent tech and telecom analyst. "The weak part of AT&T's position is it is only concerned with AT&T," he said in an email. "Agreed, this merger with T-Mobile would be good news for AT&T; however, the problem is it would not be good for the industry."

The merger would create two mobile giants, AT&T and Verizon, with much more power than any other competitors, Kagan said. "That limited number of competitors will harm competition, increase prices and reduce innovation," he said.

 

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