Saturday, June 11, 2011, 07:00 pm PT (10:00 pm ET)
AT&T defends T-Mobile acquisition, says no effect on competitionAT&T filed a statement with the U.S. Federal Communications Commission on Friday claiming that the wireless market will "remain vibrantly competitive" after its merger with T-Mobile USA.
The filing contains AT&T's response to a petition by rival carrier Sprint opposing the $39 billion deal. Sprint alleged in its filing that the acquisition would hurt smaller carriers trying to negotiate for backhaul and roaming agreements. The petition also cited an industry expert accusing AT&T of inadequate investment in its network to prepare for 4G LTE.
In addition to responding to Sprint's petition, the AT&T filing also answers a list of questions that the FCC sent last month.
AT&T focused on five key points throughout the statement. First, the wireless carrier asserts that "the transaction will generate jobs and economic growth." If the merger goes through, AT&T plans to invest more than $8 billion to expand LTE deployment and to integrate the AT&T and T-Mobile USA networks. In particular, the company sees the LTE expansion as having "job-creating ripple effects" throughout the economy.
The filing also claims that the transaction will "preserve and promote competition and innovation. "Nothing about the combination of AT&T and T-Mobile USA could possibly keep Sprint or any other provider from acting on the same incentives it has today to keep innovating in this unusually dynamic ecosystem," AT&T said, citing "incredible support for [the merger] from a large and broadly diverse number of high-tech companies."
"As anyone who watches television or reads the newspaper knows, the wireless market is one of the most competitive in the entire U.S. economy, with wireless providers aggressively marketing a vast array of products and services," the company wrote. AT&T alleges that the resurgence of Sprint and the fact that roughly 75 percent of Americans have a choice of five or more facilities-based wireless providers demonstrate "the basic competitive realities" in the American market.
According to AT&T, the post-acquisition company will have a far greater network capacity than its pre-merger parts. The company takes issue with accusations of underinvestment, arguing that its $75 billion investment to upgrade its wireline and wireless networks is "more than any other public company has invested in the U.S."
AT&T also turned the tables on Sprint, noting that Clearwire, which Sprint owns a majority stake in, has a "far stronger" combined spectrum position than AT&T and T-Mobile. With an average of 160-megahertz of spectrum in the top markets, Clearwire has the "best spectrum position in the industry," the filing claims. "This is more than the combined AT&T/T-Mobile company would have if their merger is approved, and does not even include the additional spectrum Sprint holds directly."
During a Senate hearing investigating the proposed acquisition last month, AT&T promised that it would reach 97 percent of the nation's population with 4G LTE if the deal was approved. Meanwhile, Sprint CEO Dan Hesse called for Congress to "just say no to this takeover."
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