Kan. AG urges FCC to block AT&T's T-Mobile acquisition

Bryan Cohen Nov. 23, 2011, 3:43pm


TOPEKA, Kan. (Legal Newsline) - Kansas Attorney General Derek Schmidt has urged the Federal Communications Commission to block AT&T's proposed acquisition of T-Mobile.

In a filing Monday, Schmidt alleges that the merger would reduce the number of national wireless competitors from four to three and that AT&T is already one of the two largest wireless firms, along with Verizon. According to his filing, T-Mobile has a reputation as a low-cost, innovative competitor, The Hill reports.

"The loss of T-Mobile through its consolidation with one of the two industry giants will deal a blow to competition and, ultimately, to consumers' choice, satisfaction and cost, with no substantial benefit to offset this loss," Schmidt said, according to The Hill.

Schmidt acknowledged that expanding wireless broadband access is important to rural states like Kansas, but rejected AT&T's argument that the merger would improve its network coverage.

"With or without this proposed merger, AT&T will have to continue LTE rollout beyond 80 percent to remain competitive," Schmidt said, according to The Hill.

Schmidt argued that AT&T needs to compete with Verizon, which has launched next-generation wireless technology in dozens of cities. If the $39 billion dollar deal goes through, it would catapult AT&T over Verizon Wireless as the largest U.S. wireless carrier by subscribers, Dow Jones Newswires reports.

The Justice Department filed an antitrust suit on Aug. 31, arguing that the merger of AT&T and T-Mobile would violate antitrust law by "substantially" reducing competition in the wireless market. Seven states and Puerto Rico have joined the Justice Department's case, but Kansas was not among them. The seven states include Illinois, California, Massachusetts, New York, Ohio, Pennsylvania and Washington.

"Without this merger, AT&T will continue to experience capacity constraints, millions of customers will be deprived of faster and higher quality services, and innovation and infrastructure will be stunted," AT&T said in response to the DOJ's complaint. "If this transaction does not close due to Plaintiff's lawsuit, wireless consumers will, as the FCC chairman predicts, increasingly face higher prices and lower quality."

The FCC is currently conducting its own review to ascertain if the transaction is in the best interest of the public.

An AT&T spokesman said that many public officials support the deal.

"It is not unusual for state attorneys general to participate in merger review proceedings," the spokesman said in an email, according to The Hill. "At the same time, we appreciate that state attorneys general are publicly supportive of our merger, as are hundreds of other local, state and federal officials."

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