AT&T has just posted a scathing response to the FCC’s report on its proposed T-Mobile acquisition and said the government agency’s analysis was “one-sided” and sounded more like an “advocacy piece” than a fair-minded analysis. Yowza, this kitty has claws.
AT&T has been trying to purchase T-Mobile for about $36 billion and it says the deal is needed to give it the spectrum it needs to role out 4G LTE across the country and that the deal will lead to improved coverage and more rural support. The Department of Justice has sued to block it and the FCC has also not given its stamp of approval and released a report which said the deal would kill competition. AT&T disagrees with that assessment.
“In our view, the report raises questions as to whether its authors were predisposed. The report cherry-picks facts to support its views, and ignores facts that don’t. Where facts were lacking, the report speculates, with no basis, and then treats its own speculations as if they were fact. This is clearly not the fair and objective analysis to which any party is entitled, and which we have every right to expect,” wrote Jim Cicconi, AT&T Senior Executive Vice President of External & Legislative Affairs.
AT&T says that it won’t be able to expand LTE deployment to 97.4 percent of the population without the merger, despite what the FCC says. The governmental agency said competition would force AT&T to do it regardless but the carrier says the FCC is severely overestimating how much competition and profit margins there are in bringing LTE to rural areas. I’d have to agree with AT&T on this point.
AT&T also takes issue with the FCC’s idea that the acquisition will lead to net job losses and it points to a governmental broadband fund which the FCC says will create 50,000 jobs. AT&T says the FCC is wrong because it operates under the assumption that government spending will create jobs but private investment won’t. While that’s a great applause line, I’m not sure what the answer to this one is, as AT&T has pledged to keep jobs but there are bound to be some redundancies and layoffs in such a massive deal.
I think AT&T has some credence when it points out that the FCC report doesn’t really address the spectrum concerns, which is probably the main reason AT&T wants this deal. While the government is going to auction off more spectrum, it’s not happening quickly enough for carriers’ desires.
The AT&T response is a major slap in the FCC’s face but it’s not without merit, as the decision to release the report even after AT&T withdrew it was kind of an unnecessary and grandstanding move. With the merger on the ropes and a potential joint venture on the horizon, I think AT&T wanted to deliver its own public smacking.
Update: Sprint decided to chime in and the company’s senior VP of Governmental Affairs Vonya McCann said:
“The FCC staff’s Analysis and Findings provide a careful, substantive analysis of AT&T’s proposed takeover of T-Mobile, consistent with the FCC’s role as the independent, expert agency responsible for such merger reviews. Rather than accept the expert agency’s Analysis and Findings, AT&T has chosen to make baseless claims about the FCC’s process. Let’s not forget that it was AT&T who tried to game the process by requesting to withdraw its merger application in the pre-dawn hours of Thanksgiving. AT&T can’t have it both ways: either it wanted to have an application that would be judged on the merits or it didn’t. We agree with AT&T on one point however: the public should read the Analysis and Findings on AT&T’s proposed takeover.”
