AT&T Papers Make Case for FCC Approval of T-Mobile Deal
AT&T filed two papers at the FCC addressing key questions raised about the company’s proposed buy of T-Mobile. One paper addresses the importance of local competition, while the second explains why carriers of all sizes will be able to get “cutting edge” LTE handsets at “reasonable prices” to sell to their subscribers. Both papers were heavily redacted for public release. Neither relates to the new competitive model recently offered by AT&T, which led FCC staff last week to halt the 180-day “shot clock” on the merger. AT&T is to release that model early this week, a spokesman said Monday.
Sign up for a free preview to unlock the rest of this article
Communications Daily is required reading for senior executives at top telecom corporations, law firms, lobbying organizations, associations and government agencies (including the FCC). Join them today!
"AT&T is organized to respond to competition in significant ways at the local level,” the local competition paper said. “Each of AT&T’s twenty-seven [vice president-general managers], with support from Regional and Headquarters Finance, Sales and Marketing teams, develops a competitive strategy that reaches across the many dimensions of local wireless competition to attract and retain wireless customers."
AT&T said FCC staff have asked “about the competitive significance of AT&T’s local promotions.” The paper explains how handset pricing and credits for switching from another carrier can vary from region-to-region, offering several examples. Officers in charge of the regions “tailor local promotions and offers to the specific customer base and competitive needs in a given locality,” the paper said.
The second paper argues that the merger will have no effect on the availability of LTE handsets. “Preliminarily, this concern has nothing to do with the merger,” the paper asserts. “As carriers roll out LTE in different bands globally, that will only increase the incentive of manufacturers to design and produce handsets that can work on as many bands as possible, so as to obtain the widest potential customer base for each handset."
Public Knowledge took a shot at the revised economic model even before it was released publicly. The group cited warnings that the merger would costs tens of thousands of U.S. jobs. While the FCC “stops its merger review process to examine the new plan, AT&T will use the time to spend more millions of dollars lobbying federal, state and local officials and recruiting non-governmental groups to support what is clearly a failing action,” said Public Knowledge President Gigi Sohn. “Unless this new ‘model’ can come up with a different answer to the problem of 4-1 = 3, (which would inevitably be followed by 3-1 = 2) we're not interested. Removing a major competitor from the national wireless market still makes no sense."
Meanwhile, New York law firm Bursor & Fisher, which filed an arbitration demand against the merger representing 11 AT&T customers, will file 500 more individual arbitration cases, said attorney Scott Bursor in an interview. All the arbitration cases, seeking an injunction to block the merger, will be on an independent track, separate from the FCC and Justice Department reviews, he said. The Clayton Antitrust Act permits private parties who may be adversely affected to challenge a proposed merger, he said. Additionally, Section 2.2 of AT&T’s Wireless Customer Agreement includes an Arbitration Agreement that provides for a $10,000 payment to customers who prevail at arbitration, in certain circumstances, he noted. The claims are “completely without merit,” an AT&T spokesman said, because an arbitrator has no authority to block the merger or affect the merger process in any way: “Our arbitration provision allows customers to resolve their individual disputes with AT&T in a prompt and consumer-friendly manner.” -- Howard Buskirk, Yu-Ting Wang