Worries About Building the Ma Bell of Wireless

By Wayne Rash  |  Posted 2011-05-31 Print this article Print


The merger of AT&T and T-Mobile would effectively give the descendants of Ma Bell 82 percent of the wireless service in the United States, according to Sprint.

The merger serves only to protect AT&T from competition. Sprint claims in its statement that "AT&T is simply seeking a government bailout for problems of its own making and expects the cost of the bailout to be shouldered by American consumers," according to a prepared statement by Vonya McCann, senior vice president for Government Affairs for Sprint. "Instead of paying Deutsche Telekom $39 billion, AT&T could invest a fraction of that amount to expand its LTE deployment to nearly all Americans," McCann's statement said.

While Sprint is probably the biggest opponent to the merger at this point, it's certainly not alone. A public interest group called the Diogenes Project has told eWEEK that it has filed a similar petition with the FCC. According to a copy of the pleading provided to eWEEK, the group claims that there is no evidence to support AT&T's claims that it is suffering a spectrum shortage, but that rather AT&T is trying to kill competition.

In addition, the Diogenes Project is saying in its petition to deny AT&T's license transfer that AT&T's claims that T-Mobile does not have a clear path to LTE are unsubstantiated and false. "What is truly shocking about the AT&T/T-Mobile application is the extent to which it misrepresents the conditions and capabilities of both companies and their prospects for the future were they to remain independent," the group states in its filing.

"These mischaracterizations and discrepancies have largely to do with AT&T's linchpin public interest claim, namely that AT&T's acquisition of T-Mobile's spectrum holdings is key to the availability of LTE throughout the country, and that T-Mobile having 'no clear path to LTE' is on life support."

Instead, the lack of a clear path to LTE for AT&T is ultimately AT&T's own failing, according to the source close to Sprint. "AT&T chose not to deploy; they say how hard it is to deploy," the source said. The source said that in reality AT&T is the industry laggard in deploying high-speed networking and that because of this the company should suffer the disadvantages of being too slow to compete. "If you don't respond quickly," the source said, "customers won't choose you."

Apparently the public agrees. To date, the FCC has received approximately 25,000 public comments on the application for transfer of T-Mobile's licenses to AT&T, and according to several independent counts, the comments are about 90 percent in opposition to the merger.

A sampling of the comments reviewed by eWEEK indicate deep concern on the part of the public about the potential for increased costs, the concern by T-Mobile customers that they will lose their 3G and 4G data access, and a general concern that dividing the market between two huge parts of the former AT&T wouldn't be good for consumers. The comments can be found on the FCC's Website by searching for Docket 11-65. 

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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