AT&T, T-Mobile CEOs to defend mobile mega-merger

By @ibtimes on

The impact of AT&T Inc's proposed acquisition of T-Mobile on competition, pricing and consumer choice will be examined at a congressional hearing on Wednesday where top executives are due to appear.

AT&T has touted fewer dropped calls and faster data speeds to entice consumer and policymaker support for its $39-billion bid to take over Deutsche Telekom AG's T-Mobile USA.

AT&T Chief Executive Randall Stephenson and T-Mobile USA CEO Philipp Humm are scheduled to appear before the Senate's antitrust subcommittee to defend the deal that would concentrate 80 percent of U.S. wireless contract customers in just two companies -- AT&T/T-Mobile and Verizon Wireless.

Congress has no direct role in reviewing the merger, but has oversight of the Federal Communications Commission and the Justice Department. Those two agencies are expected to take a year to complete their reviews.

A congressional staffer said lawmakers were looking for AT&T to address concerns about potential harms to competition and the threat of job losses brought on by the merger.

The deal's potential to expand faster 4G wireless services to more parts of the country, and to provide a short-term solution to the spectrum crunch threatening voice and data services in high-density areas, were appealing considerations that the subcommittee would also address, the staffer said.

AT&T's Stephenson said in prepared testimony that the merger will allow AT&T to improve its services, handle more data traffic and bring mobile Internet to 55 million more Americans than it could have done on its own.

Critics of the merger, including Sprint Nextel, Cellular South and public interest groups, will also testify before the subcommittee.

No. 3 mobile operator Sprint already faces tough competition from industry leaders Verizon Wireless and AT&T.

We continue to believe that this transaction would be bad for consumers, bad for the wireless industry and bad for the economy, Sprint spokesman John Taylor said.

The FCC is tasked with deciding if the merger is in the public interest, while the Justice Department will evaluate its antitrust implications.

The merger is already proving a tough sell for AT&T.

More than 4,800 comments have flooded the FCC's electronic filing system in just a month. A majority of the comments are from consumers unhappy with the prospect of losing T-Mobile as a carrier.

Consumers are coming out in droves as no part of any kind of planned advocacy campaign... This is grassroots opposition, Public Knowledge President Gigi Sohn said in a telephone call with reporters.

FCC Commissioner Michael Copps has expressed concern about the power and influence the combined entity would hold. Approval of this deal, he said, after it was announced in March, may be an even steeper climb than the Comcast-NBCU merger, which he voted against.

(Reporting by Jasmin Melvin; Editing by Tim Dobbyn)

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