Wireless Carriers Sniping Again As Debate Over AT&T/T-Mobile Crawls On


Credit: Flckr

The first round of public comments on AT&T’s proposed acquisition of T-Mobile is coming to a close, and two of the companies most involved in the debate–Sprint (NYSE: S) and T-Mobile–have each issued statements over the past few days coming from predictable places. Sprint thinks AT&T (NYSE: T) should find another way to grow while T-Mobile thinks its opponents are tilting at windmills.

Sprint’s massive filing with the Federal Communications Commission–299 pages worth of arguments, charts, letters, and graphs–landed with a thud Monday evening as Sprint sought to galvanize opposition to the $39 billion deal, which would combine the second and fourth-largest wireless carriers in the U.S. “If the merger were approved, there would just be three national competitors, including one that would be substantially weakened and a significant risk that the wireless market would revert to a duopoly,” lawyers for Sprint wrote at the end of the filing.

Most of the details are a bit over the head of the average cell phone user, but Sprint devoted substantial time in its filing to explaining why AT&T should be able to expand its service without having to acquire T-Mobile’s wireless spectrum, one of the main reasons why AT&T is seeking the company. Spectrum is a finite resource, and AT&T has argued that unless it acquires T-Mobile neither company will be able to bring wireless broadband to almost all of the U.S.

Sprint, on the other hand, told the FCC that AT&T is just being lazy. “AT&T would like to throw T-Mobile’s spectrum at its purported network capacity problem, but there are far more efficient means to meet the rising demand for broadband data services without creating a duopoly. AT&T can start by putting its unused spectrum to use by expediting its LTE deployment and taking common industry steps to accelerate subscriber migration to this far more spectrally efficient technology.”

AT&T responded with the public-relations equivalent of “I know you are but what am I,” telling Wireless Week that “a company that has outsourced the management of its own network shouldn’t be giving advice to others.” But after months of mostly deferring to AT&T’s lead in marshaling support for the deal, T-Mobile stepped out on its own with a statement Tuesday.

“The opponents of the AT&T/T-Mobile merger have had their final say as part of the FCC’s formal pleading cycle and, not surprisingly, they have failed to offer any credible arguments to support their view that the Commission should deny the transaction,” T-Mobile said in a release. “The FCC has long acknowledged the harmful consequences of ignoring the spectrum crunch, and we are confident it will approve our proposed market-based solution.”

Getting sick of this debate already? Then you won’t be thrilled to learn that AT&T doesn’t think it will be able to get the deal done until March 2012 at the earliest, as it will have to deal with federal, state and local regulators with questions about the deal, which will keep the rhetoric flowing for quite some time to come.


Conrad Sands

Consumers are finally noticing that AT&T and Verizon = The Most Expensive Wireless Plans in America. We know where Verizon (the 10th leading U.S. lobbyist) and AT&T (the 12th leading U.S. lobbyist) get all that money to run commercials 24×7, pay out huge “fat cat” executive bonuses and hire armies of lawyers and lobbyists to push the U.S. market into a wireless industry duopoly — the American consumer.
Taking into account the whole U.S. market, a combination of Dallas-based AT&T and T-Mobile will raise the Herfindahl- Hirschman Index (HHI), an accepted measure of market concentration, to 3,216 from 2,848, according to a Bloomberg analysis. Any score above 2,500 can indicate a highly concentrated market, and an increase of more than 200 points is “likely to enhance market power,” according to federal guidelines.
If this ridiculous deal goes through, Sprint will be the only low-priced post-paid national wireless carrier left in the United States. T-Mobile customers are already fleeing to Sprint because they know they won’t get low prices from AT&T or Verizon. But AT&T and Verizon are two of the top corporate lobbyists in the country, so I’m sure the Feds are happy to oblige anything they want to do to secure a stranglehold on the market at the expense of the consumer.
-       Pricing: Controlling approximately 80 percent of the market would give the Twin Bells significant, unchecked leverage to increase prices for consumers for voice and data.
-       Last Mile Access: Control of most of our nation’s vast wireline infrastructure and the critical “last mile” offers the duopolists the ability to raise competitors’ costs, reduce their network quality and quash competitive alternatives.
-       Choice: Next-generation smartphone and tablet manufacturers would be discouraged from partnering with any company other than AT&T or Verizon because of their massive scale, limiting choice to consumers and opportunity for manufacturers.
-       Innovation: Content and application developers would lack incentive to create content for companies other than the Twin Bells, diminishing innovation and harming developers as well as the capital markets that fund them.


“T-Mobile customers are already fleeing to Sprint because they know they won’t get low prices from AT&T or Verizon.”  It sounds to me as if you just countered your own argument.  If AT&T pricing and service is so terrible, then T-Mobile customers will flee to Sprint, thereby negating your and Sprint’s argument.

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