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FCC riles AT&T by releasing report on T-Mobile merger

Grant Gross | Nov. 30, 2011
The U.S. Federal Communications Commission has allowed AT&T to withdraw its application to buy the mobile licenses owned by T-Mobile USA, as AT&T had requested, but the agency has also released a staff report that disputes many of the benefits the two mobile carriers claimed the merger would produce.

AT&T and Deutsche Telekom would have to refile an application for license transfer at the FCC should they prevail in the DOJ court case.

The FCC staff report says AT&T failed to make the case that the merger would create up to 96,000 new jobs in the U.S. and allow the carrier to roll out 4G service to an additional 17 percent of the U.S. population. Instead of increasing jobs, the merger would likely lead to major layoffs as the combined company cut duplicative positions, FCC officials said Tuesday.

AT&T and T-Mobile did not "attempt to give specifics or quantify their claims with respect to the number of indirect jobs that will be crated by the proposed transaction, making it impossible to assess whether any indirect employment gains, even if transaction specific and realized, will outweigh the direct employment losses," the staff report said.

The FCC cannot consider indirect jobs that "might" be created as a benefit "in the absence of concrete evidence," the report said.

AT&T and its allies have argued that the merger would allow the carrier to roll out mobile broadband to 97 percent of the U.S. population, instead of a planned 80 percent. That deployment would create new jobs at AT&T and outside the company, merger backers argued.

But the FCC staff report questioned whether the merger would lead AT&T to roll out LTE service to more areas. AT&T, in order to compete with Verizon Wireless, likely would have brought LTE to a similar number of U.S. residents, FCC officials said.

The record compiled by the FCC has "ample documentation" that AT&T had planned a "robust" deployment of LTE before it announced its plan to acquire T-Mobile, the report said.

In addition, while T-Mobile faces some challenges, there is evidence that it could also roll out LTE without the merger, the staff report said. T-Mobile has "excess spectrum it could readily deploy," and it would receive additional spectrum as part of a break-up payment from AT&T, the report said.

 

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