AT&T Defense of T-Mobile Buy Built on ‘Red Herrings’ and ‘Half Truths,’ Opponents Say

"AT&T devotes a substantial part of its opposition to the spectrum and capacity issues that it cites as the reason for its need to acquire T-Mobile,” CompTel said. “What it does not address, in other than the most general and non-market specific terms, is the competitive harm from the significant increase in horizontal market concentration in the mobile telephony/broadband services market.” Viewed in the abstract, the merger offers a number of benefits, including increased capacity on AT&T’s network, CompTel conceded. “But the Commission cannot view the alleged benefits from this transaction in the abstract,” the group said. “Instead, it must balance those benefits against the harm to competition."

Sprint Nextel, a leading opponent of the deal, hadn’t filed by our deadline. Sprint said it would file a study arguing that AT&T could increase its capacity by 600 percent by 2015 without T-Mobile. “Sprint’s filing demonstrates, once again, that AT&T’s purported rationale for the proposed merger -- that there is no other way to meet its projected data service demand growth -- is simply unfounded,” Sprint said in a written statement late Monday. “AT&T could increase its capacity by developing its warehoused spectrum, accelerating its 4G network buildout, and implementing a more efficient network architecture, just as other wireless carriers around the world are doing today.”

Free Press said the opposition filing reflects the corporate “ethos that guides the companies’ push” for a “blatantly anticompetitive and unlawful merger.” AT&T/T-Mobile want the FCC “simply to give the merged entity more spectrum, subscribers, and market power than all other wireless providers in the United States,” Free Press said. “AT&T has customers to serve, you see, and those pesky customers actually want to use the smartphones that AT&T sold to them. Neither proper investment in its network nor fair competition in the free market is a substitute, in AT&T’s reckoning, for the slanted playing field and government largesse it seeks in this transaction."

A Media Access Project-led group also fired back at AT&T/T-Mobile’s arguments in support of the deal. AT&T says, in effect, “Give us everything, and we will mobilize,” MAP said. Taking T-Mobile out of the market, “one of three direct competitors with AT&T” nationally, would “leave a void that no other carrier is capable of filling,” the filing said. “The interests of the public in competition and good service at affordable prices … trump Applicants’ interest in expanding their bad service at high prices at the expense of competition.” The Center for Media Justice, Consumers Union, New America Foundation and Writers Guild of America, West, signed MAP’s filing.

MetroPCS and NTELOS, filing jointly, counterpunched against AT&T’s arguments for why the deal should be approved. “AT&T’s attempt to marshal impressive-seeming political support cannot mask the fact that the substance of its Opposition is built of red herrings, half-truths and inconsistencies,” the carriers said. “Moreover, AT&T’s attempt to minimize the dangers of the market concentration that will result from this merger, and its endeavor to convince the Commission that the market for wireless is purely local, are not only substantively wrong but are directly contrary to AT&T’s previously held positions."

Supporters of the transaction also weighed in. Mobile Future said AT&T and T-Mobile are correct that the deal is critical for AT&T to address growing demands on its network. “This expansion in capacity is urgently needed to satisfy the tremendous demand for mobile broadband, from both rural and urban consumers alike, recognized by the Commission and most analysts,” the group said. “The transaction will help ensure that consumers are able to download the latest streaming video, monitor their health using mobile applications, or remotely lower the air conditioning in their home, all from the palm of their hand.” The National Black Church Initiative, the Hispanic Institute, the National Hispanic Foundation for the Arts and the Reason Foundation also filed in support of AT&T.

AT&T scheduled a media briefing for Tuesday to discuss the Sprint filing and the Department of Justice and FCC merger review process.