Saturday, May 28, 2011, 12:30 am
FCC questions AT&T over proposed T-Mobile purchaseThe U.S. Federal Communications Commission has submitted a request for information from AT&T with 50 questions regarding the company's proposed acquisition of T-Mobile USA.
In March, AT&T and T-Mobile USA parent company Deutsche Telekom announced plans for AT&T to acquire the rival carrier in a cash and stock deal worth roughly $39 billion. Given that the completed deal would give AT&T a wide margin as the leading wireless carrier with an estimated 130 million users, federal regulators have launched investigations into the merger.
MacNN reported Friday that the FCC filed the questions with regard to "how AT&T's wireless spectrum is being used, the nature of its overall network and why it believed it needed T-Mobile's spectrum to meet its goals for 4G." Officials were also interested in alternative solutions to purchasing T-Mobile that AT&T had considered.
The FCC requested information on AT&T's long-term pricing plans to address concerns that AT&T would leverage its post-merger size to raise rates. AT&T's answers will be kept under wraps during the FCC investigation, as officials "aren't supposed to publicly discuss proceedings until the vote itself," according to the report.
Shortly after the deal was announced, one anonymous FCC official said off the record that AT&T faces a "steep climb" in convincing the commission's chairman to approve the deal.
AT&T remains confident in its chances of getting the merger approved. "We understand that Congress, the DOJ, the FCC, as well as wireless consumers will have questions about the transaction. We look forward to answering and addressing those questions," said a spokesman. "We are confident that the facts will demonstrate that the deal is in the public interest and that competition will continue to flourish."
T-Mobile has warned that federal approval for the acquisition could take up to a year.
The Department of Justice has initiated its own investigation and isn't obligated to share information during its proceedings. The DOJ has reportedly deepened its probe into the acquisition.
Earlier this month, executives from AT&T, T-Mobile and Sprint testified at a Senate hearing regarding the deal. Senators expressed concern that the merger would create a duopoly, hurting competitors and consumers. After the CEOs from AT&T and T-Mobile hedged whether their companies were direct competitors, one senator called them out. "Come on. You guys are major competitors. Please," said Sen. Herb Kohl, D-Wisconsin.
Sprint has voiced staunch opposition to the deal, asserting that it would create a "Twin Bell" duopoly and "put Sprint to be acquired." However, AT&T asserts that the deal would boost call quality and reduce overseas roaming fees while still maintaining "intense" competition.
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