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
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.