The latest round in the controversial AT&T acquisition of T-Mobile involves reinforced assertions of the economic benefits of the deal from one side -- while the other side recruits AT&T customers to fight the deal using the company’s own agreements.

In a regulatory filing to the FCC on Monday, AT&T claimed that the acquisition of T-Mobile “will relieve significant capacity restraints” and will result in “improved service quality”. AT&T included a detailed analysis of effect that the proposed acquisition would have on New York, Los Angeles, Washington, and a dozen more of the United States’ major markets. “In each market,” the letter reads, “the merger simulations project that industry output will rise and average price adjusted for quality will fall as a result of the transaction.”

Although the $39 billion deal was originally proposed on March 20th, the FCC chose on July 20th to abandon the agency’s standard (and voluntary) six-month schedule. With new information from AT&T and the chance for other involved parties to respond, some are expecting the vetting process (a joint effort by the FCC and the Justice Department) to last well past September of this year.

Opponents of the deal, including competitor Sprint Nextel and a number of US congressmen, have voiced concerns about the negative effects on competition -- specifically, that the results will leave Verizon (the country’s largest cell provider) and a combined AT&T and T-Mobile with a duopoly, controlling 80% of the US market.

Among those legislators who have sent letter of opposition on July 20th to FCC Chairman Julius Genachowski and Attorney General Eric Holder are Representatives Edward Markey (D-Massachusetts), John Conyers (D-Michigan) and Anna Eshoo (D-California), as well as Senator Herb Kohl (D-Wisconsin), the Chairman of the Senate Judiciary antitrust subcommittee.

Meanwhile, lawyers from the New York firm of Bursor & Fisher have begun enlisting AT&T’s own customers to participate in “Fight the Merger”, which is based around AT&T’s own policies -- specifically, the company’s Arbitration Agreement. According to Ars Technica, Burson & Fisher have experience with the specific legal issues encountered in the telecommunications industry, and specifically with the legal battles of customers of AT&T and T-Mobile (as well as Verizon, Cingular, and Sprint).

However, AT&T does not seem to be taking the challenge seriously. “The claims made by the Bursor & Fisher Law Firm are completely without merit," said an AT&T spokesperson to Ars Technica. "An arbitrator has no authority to block the merger or affect the merger process in any way. Our arbitration provision allows customers to resolve their individual disputes with AT&T in a prompt and consumer-friendly manner.”

 

James Lee Phillips is a Senior Writer & Research Analyst for IBG.com. With offices in Dallas, Las Vegas, and New York, & London, IBG is quickly becoming the leading expert in Internet Marketing, Local Search, SEO, Website Development and Reputation Management. More information can be found at www.ibg.com. Stephen Hicks is the CEO of Southridge which is a diversified financial holding company.