FCC Directs ATandT to Deliver Evidence to Justify T-Mobile Buyout

By Wayne Rash  |  Posted 2011-05-29 Print this article Print

News Analysis: The FCC is directing AT&T to provide evidence to back up its claims justifying the proposed $39 billion buyout of T-Mobile. California will likely join Louisiana and perhaps West Virginia in investigating the proposed merger of the two cell companies.

The Federal Communications Commission has asked AT&T for evidence to back up its claims that it doesn't have enough spectrum to provide future service as it claimed in its request to transfer T-Mobile's licenses to itself.

The FCC also directed that AT&T back up its claims that no jobs would be lost by providing information that AT&T gave to Wall Street analyst and others. In addition, the FCC requested information on whether AT&T would keep the T-Mobile brand and whether it would keep its pricing plans. The basic request is available on the FCC's Website.

It its April 21 filing with the FCC, AT&T claimed that it faces spectrum shortages more severe than any other carrier. The FCC request of May 27 asks AT&T to provide evidence of that assertion. FCC officials have previously told eWEEK that they don't plan to "rubber stamp" the AT&T merger request and instead plan to give it very detailed scrutiny. Once AT&T provides the evidence that the FCC requested, the Commission can ask for additional information or it can require testimony from AT&T and T-Mobile executives.

Groups opposing the merger of AT&T and T-Mobile have made statements supporting the FCC's request for further information. One group, Public Knowledge, said in a Capitol Hill press conference hosted by Rep. John Conyers (D-MI), the senior Democrat on the House Judiciary Committee, that it would be hard to imagine a takeover that would do more harm to consumers. The group's president and co-founder, Gigi Sohn, said that the merger would lead to higher prices, less innovation and ultimately an unregulated duopoly.

Eventually the FCC will hold hearings on the proposed transfer of licenses, which is an essential part of the merger. Without FCC approval, the merger can't take place. Also standing in the way of the merger are the public utility commissions of states that assert regulatory authority over communications companies.

The Louisiana PUC has already announced that it has voted to open an inquiry into the merger. California's PUC is considering an inquiry. Earlier in May, Sprint requested a similar inquiry to the West Virginia Public Utilities Commission. The commission there has yet to act on the request.

One item that's certain to come up in these inquiries and perhaps in the FCC hearings is the apparent conflict between what AT&T claims in its license application versus what's been said in other arenas. For example, in its request to the West Virginia PUC to reject Sprint's petition for an inquiry into the merger, AT&T claims that acquiring T-Mobile will give it a vast improvement in statewide coverage.

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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