ATandT Dupes Non-Profits to Support $39 Billion T-Mobile Buyout

By Wayne Rash  |  Posted 2011-06-20

ATandT Dupes Non-Profits to Support $39 Billion T-Mobile Buyout

One rule of covering the news in Washington is to expect the strange, the weird and frequently, the deceitful. Things are rarely what they seem to be, and motives are rarely pure. In some cases, of course, people and groups with interests before Congress and federal agencies just plain lie. And sometimes they get away with it.

Take, for example, the lobbying that's going on in regard to the Federal Communications Commission's review of AT&T's proposed $39 billion buyout of T-Mobile. Public interest groups of various types are popping up from across the country to back the merger. Some of these groups, such as the Internet Innovation Alliance, appear to represent people with a valid interest in the outcome of the merger. But as I said, in Washington, things are rarely what they appear to be. In this case, the IIA, despite its claims to the contrary, is a front for AT&T.

Of course, the IIA makes a big point of saying it's working to ensure the delivery of rural broadband, a service that's badly needed in the United States. But look a little deeper, and you'll find that the IIA is giving lip service to rural broadband as a way to get farm bureaus and rural health associations on board. AT&T's own congressional testimony about the merger has shown that T-Mobile's wireless services are concentrated in urban areas. AT&T's buyout of T-Mobile will have little effect on whether or not AT&T ever extends wireless broadband services to rural areas.

What they're not telling you is that the new honorary chair of the IIA, former Democratic Congressman Rick Boucher, is now a partner with the law firm of Sidley Austin. Sidley Austin maintains both legal and lobbying offices in Washington. One of the companies that Sidley Austin represents, and has for over 100 years, is AT&T.

In other words, the chair of the IIA is in reality working for AT&T. If you look a little deeper at the alliance's Website, you'll find that AT&T is also a major sponsor of the supposedly independent IIA. In other words, the filings by the IIA and the press call that the group had on June 16 to parade a series of rural broadband advocates before the media were basically a fraud. Boucher's role working for AT&T and AT&T's sponsorship of the organization were not disclosed.

Admittedly, it only took an hour or so of research and calls to people familiar with AT&T's activities to reveal AT&T's deception, but one must wonder how many of the people on that press call knew that they were being set up? Does the South Dakota Farmers Union know that adding T-Mobile to AT&T in the state will have no effect at all due to T-Mobile's limited presence in the state?

Will Lies, Manipulation Matter if the Merger Is Approved?


Does the Alabama Rural Health Association know that its dreams of broadband for rural telemedicine will probably go unanswered for the same reason? How about the Oklahoma Farm Bureau, a state where T-Mobile has virtually no presence? These organizations and others received donations from AT&T and apparently were promised that they'd get broadband as soon as the merger happened, even though testimony in congressional hearings last month contradicted that.

So if you can't believe AT&T when it makes claims about facts that can actually be checked, what about things that are a little harder to check? In May, Sprint disputed AT&T's claim that the company has insufficient spectrum to deploy LTE. But even in AT&T's rebuttal, the company offered no details on why that claim was wrong. In fact, AT&T's rebuttal seemed to be a tactic often used in Washington called "Proof by Repeated Assertion." In other words, if you claim the same thing often enough, people will think it's true.

Now, Sprint has submitted another filing with the FCC, calling AT&T's hand on its spectrum claims. According to Sprint Senior Vice President for Government Affairs Vonya McCann, AT&T's spectrum claims are wrong.

"Sprint will present a detailed technical analysis explaining how AT&T could increase its network capacity by more than 600 percent by 2015 without subjecting the country to the anti-competitive and anti-consumer harms associated with its proposed takeover of T-Mobile," she said in a prepared statement. "This capacity increase could more than meet AT&T's projected data service demand growth through and beyond 2015 for a fraction of the cost of its proposed $39 billion takeover of T-Mobile."

If what Sprint says is true (and I haven't been able to do a complete technical analysis of Sprint's analysis), then AT&T is in fact not telling the truth to the FCC and maybe not to Congress. But if the merger is ultimately approved by the FCC, the Securities & Exchange Commission and the U.S. Department of Justice, who will remember or care whether or not AT&T was telling the truth about whether it truly needed T-Mobile's spectrum to expand its network capacity? It will come down to a matter of opinion, and it's unlikely that Congress or any other legal entity will investigate whether AT&T was telling the truth. After all, how can a mere government compete with a corporation that can recruit an army of lawyers and wield a bottomless bag of lobbying dollars?

But when I heard those desperate pleas by those organizations that they need rural broadband so badly that it's literally a matter of life and death to them, I can't help but wonder how they are going to feel when they find out that all AT&T wants from them is their cards and letters to the FCC. Or how they'll feel when they find out that AT&T never had any intention of giving them the broadband they need so badly. How will they feel when they finally learn that they've been duped? 

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