FCC Asks AT&T To Explain Discrepancy Over Claimed Need For T-Mobile vs. Internal Discussions

from the oops dept

Thu, Aug 25th 2011 7:00pm — Mike Masnick

A few weeks ago, AT&T accidentally revealed that it had a plan to cover 97% of the population with its 4G/LTE service. That's a big deal, because a big part of the rationale for the T-Mobile merger was that it simply could not deliver that kind of coverage without the merger. AT&T has worked furiously since then to basically deny what the filing clearly stated. They've been doing so by trying to change around what basic words mean (which is kind of funny). However, it looks like they haven't convinced one rather important player. The FCC is now asking for evidence that AT&T actually needs T-Mobile as it keeps claiming. It's still pretty likely that this all gets approved, but it definitely has presented pretty clearly how the rationales being given for why this deal is "necessary" are hogwash. No one denies that it will be much easier for AT&T, but that's not the same thing as necessary.

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Filed Under: 4g, fcc, merger, wireless
Companies: at&t, t-mobile

15 Comments

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Jose_X, 25 Aug 2011 @ 7:14pm

Evidence is always nice
In my special dream place tonight the SCOTUS will be asking Congress to show evidence that patents promote the progress.
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Prashanth (profile), 25 Aug 2011 @ 7:23pm

Maybe I'm an optimist, but I figured after I saw the initial news article detailing the leaked memos that the FCC would surely strike the proposed merger down, no further questions asked. I still hope that happens, and in any case, I do hope the merger does not get approved.
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fogbugzd (profile), 25 Aug 2011 @ 7:27pm

The merger would make life a little easier for AT&T. And it would make life for consumers a lot more difficult (or at least expensive).

We need more competition in the mobile world, not less.
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Thomas (profile), 25 Aug 2011 @ 7:50pm

Of course it will get approved..
AT&T has paid way enough money in "campaign contributions" to politicians and "gifts" to the right people in regulatory agencies. T-Mobile, on the other hand, doesn't have the money to fund (bribe) a defense.

Consumer voices will be ignored as well.

Wonder how many 10s of thousands will be unemployed once AT&T starts chopping redundant workers and departments.
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blaktron (profile), 25 Aug 2011 @ 8:02pm

Re: Of course it will get approved..
Defense? T-Mobile wants this, it creates value for shareholders. All public companies with diversified enough shareholders basically want to be bought, because they get insane premiums on their stock.
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law L., 25 Aug 2011 @ 8:30pm

Re: Re: Of course it will get approved..
...T-Mobile isn't a public company thus does not trade stock nor have shareholders.
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Jay (profile), 25 Aug 2011 @ 8:48pm

Re:
It depends on which of the commissioners wants a job with AT&T afterwards.
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blaktron (profile), 25 Aug 2011 @ 9:21pm

Re: Re: Re: Of course it will get approved..
Well, true, but its parent company is, and I was referring to those shareholders. But true, its actually possible the T-Mobile leadership is against it.
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Anonymous Coward, 25 Aug 2011 @ 11:11pm

Evidence?
AT&T: Because we said so.

FCC: Oops, so sorry, forgive us for questioning you. (goes away with tail between legs).
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anonymous, 26 Aug 2011 @ 12:33am

Re: Of course it will get approved..
i also wonder how many of the job losses will be attributed to 'piracy'? after all, that is the usual thing to blame. it's never anything to do with the companies/industries themselves, is it!
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Anonymous Coward, 26 Aug 2011 @ 6:59am

This is just all a puppet show.

If the FCC is going to approve mergers anyway, why even have an FCC? Oh, that's right, to impose a government established monopoly to prevent competition from entering the market. To scam the consumer and take away our rights.
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Anonymous Coward, 26 Aug 2011 @ 7:30am

If the FCC approves this then it just proves to all of us with a brain how corrupt our own Government truly is.
We will need to do some serious Protests and make Sacrifices to win back the Government for the People.
I say that soon it is time for a Million Man March On Corruption in Washington.I will gladly go and get arrested and what will they do when a Million People Blockade the Senate !!!
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Derek Kerton (profile), 26 Aug 2011 @ 11:53am

Re:
"We need more competition in the mobile world, not less."

It's coming:

MetroPCS
Clearwire
Cox cable
Comcast
LightSquared
Dish Network
Leap / Cricket
Wi-Fi

The market does not need T-Mo to be competitive. Many new entrants are entering / about to enter / planning to enter. Many of the have already bought spectrum for $ billions.
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Derek Kerton (profile), 26 Aug 2011 @ 11:59am

Re: Re: Re: Re: Of course it will get approved..
Nope, they are for it. And parent company Deutsche Telekom is for it. They want to cash out, since T-Mo is performing poorly, and the future prospects aren't that good.

The question facing policymakers should not be "do we want to approve this deal?" That implies we should have government meddle in deals, "approve" of whatever we do, and distort business unnecessarily.

The question should be "Is this deal detrimental enough to the state of competition in the industry that we should choose the strong and undesirable move of market interference in order to protect consumers?"

A case can be made for the second question on either side of the debate. But THAT should be the question.
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Derek Kerton (profile), 26 Aug 2011 @ 12:15pm

I'm For The Deal
The above article shows that AT&T has overstated/exaggerated/lied about one of their arguments supporting the deal.

That's not good, but it's hardly news to me, nor was this particular claim of theirs even that credible to begin with. AT&T is making a variety of claims on the pro side of the deal, some true, some specious. The people on the con side of the deal are doing much the same. When has the beltway lobby circuit ever had a debate that was not thus?

The reason I support the deal is because I don't like government market interference unless it is necessary (which it often is). I see a fairly competitive market, with many new competitors entering the market, and I see T-Mobile as a fading power.

Most people look at this deal by considering the T-Mo and the market of TODAY. Today, T-Mobile is arguably the best competitor out there. They offer lower pricing, a national network, competitive phones, and relatively good customer service. They have been, and remain today very important to competition in the US marketplace.

But what everyone seems to fail to consider (since they don't spend their day analyzing telecom and predicting trends) is that the independent T-Mo is at an impasse. It is out of spectrum. This is why Deutsche Telekom wants to unload it. T-Mo is doing great in a 2G and 3G market, but has NO spectrum for 4G, and NO roadmap to be competitive in 3 years. It's spectrum is completely full (unlike, say Sprint), and they did not win any more at the 700MHz auction.

In 3 years (if no merger), Sprint, MetroPCS, Verizon, AT&T, Clear, and others will all have 4G networks, and the latest and greatest phones running on them. T-Mo will be stuck offering the best 3G phones available (like bringing a knife to a gunfight). Sprint will use its excess spectrum to be more competitive and will become the low-price national competitor. T-Mo will be low price, but also low-quality because of the lack of 4G. MetroPCS and others will grow and remain the best priced packages, but will remain regional with national roaming.

Some of these companies will be increasingly significant:
MetroPCS
Clearwire
Cox cable
Comcast
LightSquared
Dish Network
Leap / Cricket
Wi-Fi (or some new technology)

They have all made serious moves towards entering or expanding in the wireless market.

So, tell me again why we need T-Mo to make the market competitive in 2013-2020?
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