AT&T Slams FCC Report On T-Mobile Merger

By Jasmin Melvin

(Reuters) - AT&T Inc accused the staff of the U.S. communications regulator of being "one-sided" in a report critical of AT&T's proposed buy of T-Mobile USA from Deutsche Telekom.

"The report cherry-picks facts to support its (the staff) views, and ignores facts that don't. Where facts were lacking, the report speculates," Jim Cicconi, AT&T's chief lobbyist, said in a statement.

The Federal Communications Commission released a staff report this week that criticized AT&T's $39 billion plan to purchase T-Mobile USA for leading to high prices and job losses.

AT&T has withdrawn its FCC merger request, saying it will focus on fighting a Justice Department lawsuit that seeks to block the deal on antitrust grounds.

The company, since March, has said the deal would expand faster wireless service to 97 percent of the country, and bring jobs back to the United States.

But the FCC staff report released on Tuesday took issue with many of AT&T's touted benefits and said the companies failed to prove the transaction was in the public interest.

The 157-page analysis found that among the top 100 U.S. markets, only Omaha, Nebraska, would be left with significant wireless competition if the merger went through.

Acquiring T-Mobile would vault No. 2-ranked AT&T into the leading position in the U.S. wireless market, overtaking Verizon Wireless, a venture of Verizon Communications Inc and Vodafone Group Plc.

The report also predicted massive job losses and concluded that the merger would not result in significantly more build-out of next generation 4G wireless service than would occur absent the transaction.

Cicconi challenged all of these findings, saying the agency failed to give the merger a fair and objective look.

"The document is so obviously one-sided that any fair-minded person reading it is left with the clear impression that it is an advocacy piece, and not a considered analysis," Cicconi said.

AT&T disputed the agency's conclusion that the T-Mobile deal, with $8 billion in broadband investment and commitments on job preservation and enhancement, would result in the loss of jobs and investment.

The FCC recently said its $4.5 billion annual fund to promote broadband to underserved communities would create 500,00 jobs over the next six years.

"This notion -- that government spending on broadband deployment creates jobs and economic growth, but private investment does not -- makes no sense," Cicconi said.

Cicconi also said there were inconsistencies in the report's analysis of mobile competition. The report, he said, assumes a high level of competition in rural areas that would compel buildout without the merger, while also suggesting that competition in more populated areas is fragile.

He said the report failed to consider that T-Mobile has been losing customers and its parent company has said it will not be able to continue funding the U.S. unit.

Cicconi acknowledged the deal raises some concerns but said AT&T has made clear its commitment to addressing these issues.

(Reporting by Jasmin Melvin in Washington, D.C.; Editing by Tim Dobbyn)

Copyright 2011 Thomson Reuters. Click for Restrictions

Comments

[bradkevans]

09:31 AM on 12/02/2011

With or without the merger, Tmobile is toast... Parent company will pull the plug on the company, and then there will be "real" job losses.

[Mike Knell]

02:51 AM on 12/02/2011

I have internal AT&T documents which prove AT&T repeatedly lied to regulators about the condition of its underground infrastructure, in order to avoid paying millions of dollars in fines to the State of California.
An AT&T executive threatened to report me to National Security because I have AT&T documents on the following webpage: http://mikeandmabell.com/FBI/History-More_Info-11.html

I would like to ask Jim Cicconi, AT&T's chief lobbyist, if he is willing to answer if AT&T lied to regulators about the phone number in the document I provided to the California Public Utilities Commission: http://www.mikeandmabell.com/FBI/History-Fictional-Number.html

[Ozarks]

01:09 AM on 12/02/2011

Too bad AT&T chose to withdraw its application and pay out $4 billion to Mobile instead of defending merger proposal before an Administrative Judge.

[lindaj3884]

01:04 AM on 12/02/2011

It is not one sided. It is truth. The aim is to buy up spectrum and take over another business to crush competition. Doesn't take a genius to figure it out.

[Ozarks]

05:28 PM on 12/01/2011

"AT&T has withdrawn its FCC merger request, saying it will focus on fighting a Justice Department lawsuit that seeks to block the deal on antitrust grounds". Got news for you AT&T: there is no longer a "deal" since there is no longer a filed FCC merger request. Once you withdrew your application there is no longer any chance of any antitrust violations. DOJ will probably ask for a "summary judgement" saying there is no longer any probable antitrust grounds for the lawsuit.

[becky bradshaw]

09:39 PM on 12/01/2011

AT&T has the best lawyers and politicians money can buy. They may well eventually lose, but don't can't them out yet. AT&T well understands venue shopping. If they stand to lose in venue A, they will move to venue B (or C), or wait for a new set of judges.

Reference: http://www.bloomberg.com/news/2011-09-21/at-t-gave-963-275-to-lawmakers-urging-u-s-approval-of-t-mobile-purchase.html

[ur2nutty4me]

10:33 PM on 12/01/2011

As the mood of the country swings, that might not be a wise choice of action.

[Ozarks]

12:57 AM on 12/02/2011

100 politicians cannot replace the FCC authority. Your link is Sep 21, 2011 when AT&T still had a filed case ( Maybe it was the third "informal" try I forget) but AT&T no longer has an application to buy Mobile. I got news for you , paying out $4 Billion in cash to Mobile is not some eventual possible loss especially when there is no longer any merger proposal before the FCC nor anti trust "venue" for the DOJ to oppose. What you see is these bozo's trying to save their jobs since stockholders are going to eat the $4 billion payout.

[Ozarks]

05:24 PM on 12/01/2011

"The report cherry-picks facts to support its (the staff) views, and ignores facts that don't". Yea Right and that is why AT&T will payout $4 billion to not let an Administrative Judge hear AT&T's "facts" in a court setting. In an admin court it is called "prefiled rebuttal" to FCC Staff's direct filed case with FCC expert witness testimony supporting its "report".

[Tsalco]

04:56 PM on 12/01/2011

For many of us T-Mobile has been the only choice of the big carriers. MANY T-Mobile customers are AT&T refugees. Getting AWAY from AT&T was as important as going over to a decent company. They pay less, get MUCH better service, aren't trapped by onerous contracts, and perhaps most importantly are not paying a criminal company that willing cooperated with the Bush administration and the illegal NSA wiretapping.

AT&T is a company lacking ethics and constantly drops calls even in the middle of big cities.

T-Mobile's service has been great even in very remote areas. They are much better than the press makes them out to be.

If the merger were to occur there will be a flood of T-Mobile customers switching to another smaller provider. If Virgin were to improve a bit they could be the main beneficiary. There is zero chance that many of us will be AT&T customers.

AT&T says that the merger would improve service for their customers. There is already a great way for AT&T customers to get better service immediately - switch to T-Mobile or almost any other carrier.

[tuzi76]

11:22 PM on 12/01/2011

Ok so you don't like the merger but what are you going to do when T-Mobile just shuts down its US operations. This is what will happen if this deal is not done, Deutsche Telekom has already stated they are not updating or investing more recources into T-Mobile USA due to the fact that it has not shown a profit in over 3 years. Those of us that work in the industry know that no matter what T-Mobile is gone for good in the next couple of years let it be to ATT or just from being shut down by its parent company.

[Tsalco]

02:07 AM on 12/02/2011

First, nobody knows the future for certain. I remember how "Those of us who work in the industry" were certain of the death of Apple for many years. They're sure doing a lot of marketing for a dying company.

If T-Mobile goes down in a couple of years, well we get a couple more years of good service and time for companies such as Virgin to improve.

In the meantime, happy customers such as myself will continue to get our friends who are desperate to leave AT&T to switch and will help to improve T-Mobile's customer base while hurting AT&T.

It is interesting to note that I cannot think of a single person who has switched to AT&T, or know of a anyone who is a current customer while I can easily recall friends that are on all of the other major networks. It would appear that the major reason that AT&T did well was because of iPhone exclusivity. Now that there is no real reason to be with AT&T, it is possible that they will be the ones hurting in a few years. They may need T-Mobile more than the pundits think that T-Mobile needs them.

Whether T-Mobile survives or not, we will never be AT&T customers. Utter lack of ethics are the primary reason, followed closely by the horrible service.

[jed Houston]

11:31 PM on 12/01/2011

You are right on the money. AT&T is a lying and corrupt company with profits that rival oil companies, it's no joke. I have been with T-Mobile for years, and it's been a great experience. I know that I have zero interest in being with Verizon or AT&T.

[SDLee]

04:43 PM on 12/01/2011

he FCC is a thorn in their side but the DOJ's rejection was fatal. The merger proposal was anti-competitive and just a get rich scheme for AT&T managers, board members and institutional shareholders. Instead, 4 billion dollars of shareholders money went to lawyers fees and mega bonuses to Deutsche Telecom managers and the like. The corporate world is filled with criminals and irresponsible, stupid businessmen.

[nostrodamusc]

03:03 PM on 12/01/2011

Trust me, if the ATT and T-mobile merger is allowed, no matter what it costs ATT, they will make the consumer pay for this acquisition, by getting rid of competition you can expect a price rise. The average cost of a cell phone for a consumer in Mexico is 100$ per month, and why is that, because Carlos Slim holds a monopoly on cell phones, do we want the same thing here?

[ladyvader]

03:28 PM on 12/01/2011

Many people pay that in the US now for their cell phone. I don't, but I know many that do.

[ILoveGreatDanes]

03:34 PM on 12/01/2011

That's because they're with Verizon. My husband went in there looking for a Samsung Galaxy tablet. We have TMobile, and the no contract price for the tablet was $399. With Verizon, that same tablet was $599 with a 2 year contract! All of their cell phones are ridiculously overpriced. I'm glad it looks like the merger is not going to work out. My $50 all-you-can-eat TMobile plan works great with my spiffy Android phone that I paid cash for.

[nostrodamusc]

05:22 PM on 12/01/2011

yes but the average worker in Mexico makes much less in salary then we do over here in the US,

[Java1959]

02:39 PM on 12/01/2011

Hehehe, AT&T is throwing a tantrum.

If they had invested in infrastructure instead of wallowing in exorbitant investor and CEO profit-taking they wouldn't be getting caught with their pants down right now.

I talked to them yesterday to cancel my AT&T service. "Oh but don't go!, We have high speed internet too!". Well, "how fast is it?". "6mbps!". "Sorry I just got a 60mbps connection from Comcast, see ya!".

Comcast is another story but at least they saw the writing on the wall and invested in their future.

[ladyvader]

03:31 PM on 12/01/2011

ATT internet is DSL. No thanks.

I was with Cingular before ATT bought it out. I'm still with them. Heck, I still have the same plan I did in 2003. 500 day time minutes/5000 night and weekends for $39.99 per month. I picked up a HTC phone in October and had to add a $15 a month data plan. I don't do much on the web from the phone, but it has been handy so far.

My plan of 500/5000 isn't even offered anymore, but I still keep it every time I upgrade to a new "free" phone. I have yet to ever pay for a cell phone from ATT. Even my HTC Inspire was free.

[none2]

08:12 AM on 12/02/2011

Cingular was a joint venture between Southwestern Bell & Bell South. SW Bell owned 60%, and Bell South owned 40% of the venture.

At one point Cingular bought out AT&T Wireless (around 2004). In 2005, Southwestern Bell bought out the original AT&T (what was left of it -- namely long distance), and Southwestern Bell choose to re-brand themselves as AT&T. Then in 2006, AT&T (formerly known as Southwestern Bell) bought out Bell South. At that point, Cingular was completely owned by ATT (SW Bell renamed). So technically, AT&T didn't buy Cingular, they simply bought out their other partner Bell South which owned the remaining 40% of the Cingular venture.

[jed Houston]

11:55 PM on 12/01/2011

You're right, Comcast is another story, they aren't as bad as AT&T, but they would like to be. I recently dumped Comcast for too many "miscellaneous" fees on my bill. I'm new to DirectTV, so don't have a lot of experience with them as a company, but their HD picture quality is way, way better than Comcast.