ATandT, T-Mobile Slam Merger Opponents in FCC Motion
News Analysis: Deutsche Telekom and AT&T filed their formal replies to the opponents of their $39 billion merger raising the stakes and the name-calling to new levels.
AT&T and Deutsche Telekom filed their replies
to motions calling on the government to deny their proposed $39 billion
merger application on July 10, the deadline for filing such motions
with Federal Communications Commission.
The 229-page document, prepared jointly by AT&T and T-Mobile, asserts that the opponents to the merger are wrong in their claims that the proposed merger will hurt consumers. The merger is opposed by consumer groups and competing carriers, particularly Sprint, which claims it is in danger of getting priced out of the mobile carrier market if the merger is approved.
In a press release that announced the filing, T-Mobile asserted that the merger would reduce dropped calls, provide better in-building coverage and improve service to millions of consumers. The press release also claims that the merger will ease the transition to LTE. T-Mobile also said that the demand for data services was increasing four-fold each year and that without the merger the company would have trouble meeting customer demand.
In the actual document that was filed by the two companies, the primary focus seems to be on the number of groups that have voiced support for the merger, including some technology companies and labor unions. The document also classifies merger opponents as Sprint and other wireless competitors and special interest groups that "reflexively oppose all significant mergers."
In the document, AT&T does promise that T-Mobile customers will be able to keep their existing rate plans, even if they upgrade their handsets. This promise, if carried through, does seem to take the wind from the sails of opponents who claim that T-Mobile customers will suffer from "bill shock."
On the other hand, the document also confirms that AT&T plans to dismantle T-Mobile's existing 3G network, and redeploy that as LTE. This, in turn, will make the 3G devices currently owned by T-Mobile customers useless for anything beyond very slow data service and voice calls.
It's unclear whether some devices unique to T-Mobile, such as the G2 (reviewed last fall in eWEEK), will be reissued as AT&T devices. Users of other devices that are common between the two carriers, such as BlackBerrys, can get basically the same device that will support AT&T's 3G or perhaps the eventual 4G service, but they'll need to get a new contract with AT&T. The AT&T-T-Mobile document seems to indicate that they'll be able to keep their existing rate plan if they do this.
AT&T also says that coverage maps indicate that the two wireless networks complement each other and says it has proof, although those maps were not made available to eWEEK. But according to the motion, a combined AT&T and T-Mobile network would eliminate coverage holes experienced by customers of both companies. T-Mobile, for example, is focused heavily on urban and high-traffic areas where AT&T historically has had trouble with such coverage.