AT&T, T-Mobile Defend Merger Deal to Senate Antitrust Subcommittee

Lora Bentley

From the time AT&T first announced its intent to purchase T-Mobile, the companies had to know they were in for a fight with regulators and lawmakers. In a previous life, after all, AT&T held the telecommunications market in enough of a stranglehold that the Department of Justice broke it up.


That's undoubtedly why AT&T has couched everything from the announcement to the official public interest statement filed with the Federal Communications Commission in terms of how the deal will benefit consumers - and how it will enable the companies to advance the government's goal of increasing broadband access.


But the pressure increased a little when AT&T CEO Randall Stephenson and T-Mobile CEO Philipp Humm testified before the Senate Subcommittee on Antitrust, Competition Policy and Consumer Rights. From the outset, subcommittee chair Sen. Herb Kohl (D-Wis.) insisted that the companies had to convince the panel that the merger was not only not bad for consumers, but would benefit them. eWEEK quoted the lawmaker this way:

An industry that was once a monopoly owned by AT&T in the last century is in danger of reverting to a duopoly in this new century. So, we must ask, is putting the control of such a vital economic sector relied on daily by million of people in [the care of] just two or three companies good for our country?

AT&T and T-Mobile argued that the deal would not negatively impact competition in the mobile space because there are several local prepaid carriers (U.S. Cellular, MetroPCS and Cricket, to name a few) that also compete for customers.


But those opposed to the deal, including Sprint CEO Dan Hesse, who also testified for the panel, don't buy the comparison. In written testimony he said, in part:

These smaller prepaid companies provide a viable option for a limited group of customers, principally those who want a low cost phone with fewer options and features, and whose usage is primarily in a limited geographic area ... Likewise, the other few remaining post-paid carriers, which represent less than 5 percent of total post-paid subscribers, will not have the scale that will spur the Twin Bells to innovate or risk losing significant numbers of customers.

The only way to protect the market, according to Hesse, is to stop the merger altogether. The DoJ and the FCC should "Just say no," he said.

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