AT&T/T-Mobile Opponents Urge FCC to Hold Field Hearings

"Holding hearings would be consistent with the Commission’s recent actions to increase public participation in its proceedings,” the letter said. “The Commission has recently held more than 85 public forums, where members of the public and other stakeholders can make their views known, in person, to Commission staff as well as Commissioners.”

As the FCC realizes, “online participation is not enough -- particularly when millions of Americans do not have adequate broadband access,” the letter said. “Therefore, public hearings will provide an opportunity for all stakeholders to provide their input directly to the Commission."

One official behind the letter said the various groups did not have any indication from Genachowski that he wanted to hold hearings on the merger or would welcome the letter. “A lot will depend on whether the other Democrats are able to persuade him that this is to his advantage or that not doing it will backfire,” the official said.

FCC Commissioner Michael Copps, in particular, urged at the June FCC meeting that the FCC hold a series of full field hearings on the information needs of local communities across the country and has been a longtime advocate of such hearings. “I have always considered it a priority to get the Commission outside the Beltway so we can hear the voices of those who have to live with the consequences of our decisions,” Copps said Tuesday. “This is particularly true for such significant matters as far-reaching industry transactions and the future of our media.” One FCC official said field hearing on mergers are rare and not a matter of course for the commission.

AT&T and its supporters have demonstrated why the merger should go forward, a spokesman said in response to the letter. “The FCC has received extensive public comment on this transaction as well as more than a million pages of documents. And while the formal pleading cycle is closed, interested members of the public continue to make their views known in filings at the FCC."

"It is very difficult to see how public hearings will really add anything significant of an evidentiary nature that will not be provided through the paper comment process,” said Free State Foundation President Randolph May. “In any event, if any hearings are held they should not be allowed to drag out the commission’s consideration of the merger.”

Meanwhile, AT&T/T-Mobile merger backer Nathan Newman of Economic and Technology Strategies argued during a panel hosted by the Economic Policy Institute that the AT&T/T-Mobile merger is a good opportunity for regulators to impose rules that otherwise would be difficult to impose. Merger conditions are not as good as regulations since conditions expire, countered Parul Desai, policy counsel at Consumers Union.

Merger conditions should include creating specific timetables and minimum speeds for LTE broadband deployment, with penalties for failure to meet those goals, Newman said. AT&T and T-Mobile are not clients, he told us. Regulators should also require better data reporting, prohibiting handset or feature exclusivity for AT&T phones, he said. AT&T should also be required to keep smartphone applications competing with AT&T services available and offer low-cost broadband option for low-income consumers, he said. Mergers offer a good chance to demand some regulations of a major player, he said. Merger condition aren’t as strong as regulations, but they're better than nothing, he said.

It’s appropriate for regulators to look at competitive issues and decide if divestitures and other potential conditions are needed, said Debbie Goldman, research economist at Communications Workers of America. AT&T had said in filings with the FCC the merger review isn’t the proper forum for resolution of industry-wide policy issues.

The deal, with conditions, offers as a “quid pro quo” “near universal broadband in exchange for … approval,” Newman said. There’s no other clear path to universal deployment, he said. Most U.S. residents now have multiple options in choosing a wireless provider and the acquisition won’t reduce competition significantly, Goldman said. Unionization, in this case of T-Mobile workers, is also a huge public interest benefit, Goldman said.

The merger benefits that AT&T claims aren’t merger specific, Desai countered. AT&T already has the quality and quantity of spectrum it needs to deploy services, she said. Carriers aren’t obligated to build out services but it’s hard not to see AT&T expand its services for competitive reasons, she said. AT&T isn’t going to let Verizon Wireless take over the market, she said. Like AT&T, Verizon is also in the process of deploying LTE, but Verizon didn’t claim it needs additional spectrum for its LTE buildout, she said. Buying more spectrum could disincentivize carries from investing in and improving their networks, she said.

Desai agreed that union representation is good for workers but that’s just one aspect of the merger, she said. If the deal’s approved, AT&T and Verizon would control most of the U.S. mobile market, giving them little incentive to lower prices and more leverage over smaller carriers on issues like special access, she said.

Meanwhile, Rural Cellular Association President Steve Berry said he’s not surprised the FCC once again could not pronounce the wireless market competitive in its latest version of the annual Wireless Competition Report (CD June 28 p1). “With the proposed AT&T takeover of T-Mobile looming on the horizon, the industry faces a real threat of further market consolidation, which will be detrimental not only for competition, but more importantly for consumers,” Berry said.