ATandT, T-Mobile Merger Draws Objections From Congressional Democrats

 
 
By Wayne Rash  |  Posted 2011-07-20 Email Print this article Print
 
 
 
 
 
 
 

News Analysis: Ranking Democratic members in the U.S. Senate and House write the Federal Communications Commission and the Department of Justice opposing AT&T's proposed buyout of T-Mobile, but there's no hint of reaction from the GOP. Does this mean anyone will care?

The chairman of the powerful Senate Antitrust Subcommittee, Herbert Kohl, D-Wis., sent a strongly worded letter opposing the AT&T-T-Mobile merger to U.S. Attorney General Eric Holder and Federal Communications Commission Chairman Julius Genachowski.

Kohl's subcommittee is part of the Committee on the Judiciary, which effectively oversees the Department of Justice, the federal department that must ultimately decide whether or not to approve merger. While the FCC doesn't report to the Committee or to the Antitrust Subcommittee, Kohl's opposition should carry great weight.

But that wasn't the only word to come out of Washington today. T-Mobile's vice president of government affairs, Tom Sugrue, chimed in to say, "While we have a great deal of respect for Sen. Kohl, we strongly disagree with his analysis of this transaction."

In other words, T-Mobile's lawyer is saying that the senior senator who heads the Antitrust Subcommittee doesn't understand antitrust. I presume that Sugrue is saying that his years in telecom have prepared him to be an antitrust expert to such an extent that the senator in charge of such things is simply wrong.

But Sugrue, whose statement was likely prepared for him by AT&T's lawyers, wasn't the only telecom executive making a statement on the Senate Democrat's position.

Vonya McCann, Sprint's senior vice president for government affairs, added her own thoughts, agreeing with the senator: "Sprint shares Senator Kohl's extensive concerns and believes that the growing chorus of concern from policymakers, public interest advocates, and industry officials, along with tens of thousands of consumers who have filed objections with the FCC, cannot be ignored by the DOJ and FCC." Surely by now, Ms. McCann knows well that the FCC can ignore anyone, for any reason. Just look at the LightSquared fiasco for a case study in the FCC making its own rules.

But wait! There's more! Also today, three members of Congress added their support to Sen. Kohl's opposition. Congresswoman Anna Eshoo, D-Calif., Edward Markey, D-Mass., and John Conyers, D-Mich., wrote a letter to the FCC and the DOJ asking for great scrutiny over the proposed merger. All three representatives hold senior positions in committees that have an interest in the merger. In the letter, the representatives said, "We believe that AT&T's acquisition of T-Mobile would be a troubling backward step in federal public policy-a retrenchment from nearly two decades of promoting competition and open markets to acceptance of a duopoly in the wireless marketplace."

In his letter, Kohl pointed out that under antitrust law, "a merger or acquisition from four to three main competitors in an already significantly concentrated market is highly suspect under Section 7 of the Clayton Act, the statute that forbids mergers and acquisitions which 'may tend to substantially lessen competition.'"



 
 
 
 
Wayne Rash Wayne Rash is a Senior Analyst for eWEEK Labs and runs the magazine's Washington Bureau. Prior to joining eWEEK as a Senior Writer on wireless technology, he was a Senior Contributing Editor and previously a Senior Analyst in the InfoWorld Test Center. He was also a reviewer for Federal Computer Week and Information Security Magazine. Previously, he ran the reviews and events departments at CMP's InternetWeek.

He is a retired naval officer, a former principal at American Management Systems and a long-time columnist for Byte Magazine. He is a regular contributor to Plane & Pilot Magazine and The Washington Post.
 
 
 
 
 
 
 

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