Sprint Warns Merger Will Harm Consumers

By Wayne Rash  |  Posted 2011-05-03 Print this article Print


Sprint also mentions opposition by Public Knowledge, a Washington, D.C., public interest group that has taken a stand against the merger. In its statement, Public Knowledge asserts that every benefit that AT&T claims will come from the merger is already available to the company without the merger. Consumers Union, a New York-based consumers advocacy group and publisher of Consumers Reports, has also taken a stand against the merger and is quoted in the Sprint petition expressing the group's concern that the merger would eliminate a consumer-friendly and low-cost carrier from the market.

In summing up its opposition, Sprint says that the merger of AT&T and T-Mobile would adversely affect pricing, device availability, innovation, networks and the ability of competitors such as Sprint to compete. Sprint also points out that it is a CLEC (Competitive Local Exchange Carrier) in West Virginia, and as a result has an interest in the case and requests the Commission to allow the intervention and to provide further relief that the Commission may find reasonable.

This document formally lays out the arguments that Sprint CEO Dan Hesse has been making in a number of forums and which he reiterated on his earnings call in April. The reality, of course, is that if the various regulatory agencies involved allow the AT&T-T-Mobile merger to go through, Sprint will be effectively marginalized. The company will be at the mercy of much larger competitors that can freeze it out of whatever market they wish, when they wish.

Verizon Wireless is expected to receive a similar request from the Justice Department; however, a Verizon Wireless spokesperson declined to comment. It's unclear exactly what position Verizon Wireless is likely to take. On one hand, having a competitor even larger than itself is sure to be unsettling to the company. On the other hand, being able to neatly divide the U.S. Wireless business between it and AT&T with little credible interference may be tempting.

Sprint, of course, sees the danger in such an arrangement and is making its concerns known in every forum available. In addition, a company source also pointed out that there are dozens of small, regional wireless carriers throughout the United States and explained that if this merger goes through, the continued existence of those carriers is at the pleasure of AT&T and Verizon Wireless.

One has to wonder how long it would take for the Big Two to decide that there's no pleasure in having small competitors underfoot, and simply stomp them out.

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.

Submit a Comment

Loading Comments...
Manage your Newsletters: Login   Register My Newsletters

Rocket Fuel