ATandT, T-Mobile Express Dismay Over FCC Stance

By Wayne Rash  |  Posted 2011-11-22 Print this article Print


AT&T understandably is not pleased with the FCC's actions today. Larry Solomon, AT&T's senior vice president of Corporate Communications, said in a prepared statement, "The FCC's action today is disappointing. It is yet another example of a government agency acting to prevent billions in new investment and the creation of many thousands of new jobs at a time when the U.S. economy desperately needs both. At this time, we are reviewing all options."

T-Mobile USA spokesman Tim O'Regan, the company's director of public affairs, also expressed disappointment. "It is unfortunate that the FCC has decided to move in the direction of an administrative hearing regarding our transaction with AT&T," O'Regan said in a prepared statement. "Nonetheless, we are confident in the merits of our deal and that it is in the public interest."

Opponents of the merger were quick to voice their delight at the action. Sprint's Senior Vice President of Government Affairs Vonya McCann also issued a statement, saying, "As Chairman Genachowski said in August when the Justice Department filed its antitrust lawsuit against AT&T, the record before the FCC presented 'serious concerns about the impact of the proposed transaction on competition.' That record is complete and more than justifies moving this matter to an Administrative Law Judge for a hearing. We appreciate Chairman Genachowski's leadership on this issue and look forward to the FCC moving quickly to adopt a strong hearing designation order."

Meanwhile, one of the public interest groups active in the AT&T-T-Mobile merger also expressed approval of the FCC's stance. Free Press CEO Craig Aaron said, "We applaud the FCC chairman for standing up for the public interest and saving American jobs, despite intense pressure from AT&T's army of lobbyists. We are pleased that Chairman Genachowski sees through AT&T's blatant lies and misleading advertising campaign, because there is no disputing that this merger would kill tens of thousands of jobs, raise prices for consumers and kill competition in the wireless market. The Department of Justice and the FCC both agree that this merger is a bad deal, and it's time for AT&T to walk away."

The Media Access Project, which has been actively fighting AT&T's advertising claims, sounded its own note of approval. "MAP is particularly pleased that the Commission appears to have been unswayed by AT&T's highly misleading TV and radio advertisements falsely claiming that the merger would create 'up to 96,000 jobs.' In fact, as MAP explained in letters to TV stations, the highly dubious study on which AT&T relied actually claimed that the merger would generate 96,000 'job years,'" Andrew Schwartzman, MAP's senior vice president and policy director, said in a statement.

While the FCC action won't kill the merger outright, it does pose a huge, perhaps insurmountable, stumbling block to the deal. It's clear that the FCC staff doesn't believe AT&T's claims, and it's clear that the FCC chairman shares that view. While it's possible that the commission as a whole could refuse the draft order, it's unlikely. Right now, the most likely outcome is that eventually it will come to trial, unless the DOJ beats the FCC to it. 

Wayne Rash Wayne Rash is a Senior Analyst for eWEEK Labs and runs the magazineÔÇÖs 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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