A day ahead of a House Judiciary Committee hearing on the AT&T merger proposal, the leading members of key House Committees told reporters they’re opposing the deal because it will mean less competition, less innovation, jobs losses and higher prices on wireless phone and Internet access.
Former House Telecommunications Subcommittee Chairman Ed Markey said allowing the deal would put the nation in “a telecommunications time machine” and send it backwards. Markey offered a picture of wireless communications in the 1980s and early 1990s when there was no real competition and people carried “bricks” and paid 50 cents a minute for phone service.
“In 1993 we had a duopoly,” Markey explained, saying that with two dominant carriers sharing a majority of the market rapid innovation was not advantageous and we had little of it.
He said that Israel is now getting their fourth and fifth national wireless carriers, and innovation is booming. Markey said if the US decides to go backwards to two again, the US would lose its innovation leadership with handsets and mobile applications.
“It would be an historic mistake for this merger to be approved,” Markey said. “People need to understand the stakes of this reduction of competition in the marketplace.”
The top Democrat on the House Judiciary, John Conyers was equally blunt in his remarks.
“I’ve never seen a merger that didn’t lose jobs,” Conyers said, noting that more than 100,000 jobs have been cut by various AT&T as it strives to reassemble itself after being split by the Justice Department in the 1980s.
Conyers also noted with dismay that the Justice Department has acquiesed for the past 20 years while AT&T has tried to reconstitute itself back into Ma Bell, or “Ma Cell” with this new proposal.
For nearly 40 years, the Computer & Communications Industry Association has been a voice against anti-competitive behavior by dominant companies and an advocate for a more competitive marketplace.
The following statement can be attributed to CCIA’s President and CEO Ed Black, who was at the news conference with Markey, Conyers and public interest groups including the Consumers Union, Public Knowledge, Free Press and Media and the Media Access Project.
“AT&T’s brazen proposal to buy T-Mobile would shut down a uniquely maverick, innovative company in mobile broadband. That loss of competition could have not just a ripple effect, but a tsunami impact on businesses in the mobile Internet ecosystem from apps makers to handset makers, to other wireless carriers and from cell tower builders to all the smart wireless technology companies.
“Congressman Markey is right that in a duopoly marketplace there is very little incentive for the major carriers to innovate. He knows all about duopoly and competitive markets as he helped introduce new wireless competition in the 1990s. It’s ironic that AT&T, a company that stifled and delayed the introduction of cellular technology and even neglected Internet access as a business in the 1980s and 90s, is now angling to be the dominant provider of mobile broadband.”
“Antitrust law clearly prohibits killing off one out of four national competitors. The Supreme Court case US vs Philadelphia Bank established that a merger is illegal if it results in a post merger market share above 30 percent. That’s still the law of the land. This merger would hand AT&T 40 percent of the wireless market. I find it hard to believe any Justice Department would allow that – especially this one — considering AT&T’s history of abusing competitors in the marketplace and putting them out of business.”