AT&T Fails To Dispute Basic Math, History In Its Takeover Bid

BY CCIA Staff
June 20, 2011

Late last month, consumer groups, individuals, antitrust experts, state regulators and businesses told the FCC that AT&T’s proposal to takeover T-Mobile would hurt competition and wireless service quality and raise prices. AT&T responded, and today these groups had a chance to point out the holes in AT&T’s latest arguments in their FCC filings.

The Computer & Communications Industry told the FCC that AT&T has failed to refute claims that the merger will result in unprecedented, dangerous market concentration both horizontal and vertical. CCIA said the merger will stifle innovation and would not even achieve the public benefits AT&T is promising.

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:

“The fact that this merger would hand AT&T at least 43 percent of the retail wireless market means the merger is a clear a violation of US antitrust law. AT&T can’t dispute this fact and it doesn’t really try.  AT&T seems to be hoping its political and economic clout can make the facts and the law irrelevant.

“Antitrust and telecommunications policy authorities will review the harm to the public interest in this takeover.  In its FCC Opposition to Petitions to Deny, AT&T fails to disprove the merger will decrease consumer choice in wireless service, handsets, and apps. It admits it will decrease device and service plan choices and extract more money from T-Mobile customers – which can only mean rate increases.

“There is no argument to the basic math here – that AT&T eliminating the fourth largest competitor would leave us with three national wireless carriers, with the “big two” being vertically integrated and much larger than number 3.  AT&T’s attempts to say the basic math is meaningless would be laughable – if the end result were not so serious. The math means AT&T will have additional power to engage in anticompetitive conduct. We hope the government looks at the competitive reality and history here. AT&T was broken up in 1984 for anticompetitive behavior. It used its previous monopoly position to block competitors and innovation, to lock customers in and to drive up prices. Why would we risk going backward?”

The following can be attributed to CCIA Vice President Cathy Sloan:

“AT&T is counting on its political muscle to push this deal through and hoping no one looks too deeply into more technical wholesale monopoly issues like data roaming, which AT&T dismisses in its FCC filings. AT&T would have a monopoly on GSM data roaming, meaning it could charge smaller carriers whatever it likes for “out of region” interoperable network access.  That’s why this deal has the power to put more than T-Mobile out of business – many other carriers could be demolished as well.

“AT&T is hoping to get approval for this deal with conditions because it knows conditions are only temporary and usually unenforceable. The Commission imposed lower special access conditions on the AT&T BellSouth merger and AT&T just raised the rates back to pre-merger levels as soon as the condition expired.

“AT&T promises that this deal will means they’ll invest $8 billion to build out broadband to rural areas over the next 6 years. But that figure is modest compared to what other carriers have already invested — without demanding approval for a mega-merger first.  This promise, or some would say ‘bribe,’ is also completely non-specific geographically and unenforceable even if it were more specific.”

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