Public interest groups say AT&T interested in 'expanding their bad service at high prices'

A coalition of public interest groups blasted AT&T's proposed acquisition of T-Mobile USA on Monday, arguing the transaction would harm consumers and curtail competition in the wireless market.

The groups, which include Media Access Project and Consumers Union, filed a reply with the Federal Communications Commission on Monday in response to arguments from AT&T and T-Mobile that the merger would benefit consumers by accelerating the deployment of next-generation wireless access.

"Removing one of three direct competitors with AT&T from the nationwide market — and its only competitor in the GSM submarket — would leave a void that no other carrier is capable of filling," the groups state.

"Removing T-Mobile, in particular — a consumer-friendly, price-disciplining, maverick provider of low-cost and innovative mobile wireless products in an increasingly consolidated market — implicates the public interest even more palpably.

"No amount of rhetoric or economic gerrymandering of markets can change that fact."

Media Access Project filed a petition urging the FCC to deny the proposed $39 billion deal on behalf of the Center for Media Justice, Consumers Union, the New America Foundation and Writers Guild of America, West on May 31.

AT&T and T-Mobile filed in opposition on June 10, and in an accompanying blog post argued the transaction is only opposed by "Sprint and a few other wireless competitors, along with the same inside-the-beltway special interest groups that reflexively oppose all mergers."

The post cites support from organized labor, expected to be crucial to winning Democratic support.

"The bottom line is that the combined company will be able to offer more output and higher quality service — and that’s a good thing for consumers even if our competitors don’t like it," said AT&T vice president for federal regulatory affairs Joan Marsh.

"In the end, opponents’ submissions are long on rhetoric and short on substance."

The public interest groups claim AT&T has previously resisted investing to improve capacity and deploy next generation wireless networks as competitor Verizon Wireless has done.

The groups argue AT&T shouldn't be rewarded by attaching its willingness to build out its network to the government's approval of the merger.

" 'Maximizing AT&T's wealth' is not, and never has been, a public interest benefit justifying any merger, much less a legally cognizable merger-efficiency that could justify increasing concentration in an already highly-concentrated industry," the groups state.

The filing also notes that under-served groups such as minorities and rural residents tend to rely on wireless broadband service to an even greater degree, and argue that their public interest should trump AT&T's interest "in expanding their bad service at high prices at the expense of competition."

The groups note AT&T will not offer T-Mobile's service plans to AT&T customers but will simply honor existing contracts until they expire or customers request an upgrade.

They ask the commission to deny the merger, referring to the telecom giant as a "well-chronicled price hiker and strong-arm tactician."

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