AT&T: Local discounts affect wireless competition

AT&T filed a letter at the Federal Communications Commission last Friday arguing that the impact of local promotional efforts and price changes demonstrate the local nature of the wireless market.

Opponents of AT&T’s proposed $39 billion acquisition of T-Mobile USA argue the deal would leave AT&T and Verizon Wireless in control of more than 80 percent of the wireless market, with Sprint a distant third.

AT&T argues that in most major cities there will still be several local wireless providers available to provide competition. Critics note that such local providers often pay digital roaming fees to AT&T and Verizon, making them unable to compete on a large scale.

The letter, which is heavily redacted, attempts to show that local competition is significant by demonstrating the effect of local promotions such as handset discounts and other reductions to the upfront cost of purchasing wireless service. Handset pricing in particular is a commonly used tool in local strategies.

AT&T filed a second letter explaining how, even after the merger, carriers of all sizes would still have access to the latest phones that run on next-generation 4G wireless networks.