By Gautham Nagesh - 08/21/11 08:09 PM EDT
AT&T’s proposed $39 billion acquisition of T-Mobile USA appears to have re-gained momentum just weeks after encountering its first significant resistance on Capitol Hill.
Last month several Democrats went public with their concerns, highlighted by letters from Sens. Herb Kohl (D-Wis.) and Al Franken (D-Minn.) laying out exhaustive arguments for why the government should block the merger. The senators warned the deal would harm consumers and stifle innovation in the wireless market.
But any resulting surge in opposition to the deal has yet to materialize, as the telecom giant is leaving no stone unturned in its push to convince the Department of Justice and the FCC to approve the deal. According to a lobbing registration filed in May even Kohl’s former chief of staff Paul Bock is currently lobbying on behalf of the merger in his current position at Capitol Hill Strategies.
“We’re not really running into major concerns or disquiet about the deal on any scale that we feel would threaten approval,” said AT&T senior executive vice president Jim Cicconi, pointing out the deal has now been endorsed by 27 state governors, more than 100 mayors and over 150 Chambers of Commerce nationwide. “We’ve got good momentum on this and it’s growing.”
Cicconi noted 77 House Democrats have expressed support for the merger and said while there has been interest on the Hill AT&T hasn’t encountered much in the way of opposition beyond the few members that have come out publicly against the deal. Kohl’s counterpart, Senate Antitrust subpanel ranking member Mike Lee (R-Utah) and House Judiciary chairman Lamar Smith (R-Texas) have also weighed in on behalf of the merger.
“I’ve not run into anything beyond a couple of members where people are arguing against approval of the merger,” Cicconi said. “Quite the contrary, I think we’re getting a lot of support and I think it continues to grow the more people look at this merger.”
Cicconi said the spectrum and scale of operations gained through the merger would enable AT&T’s frequently-cited pledge to deploy next-generation mobile broadband to 97 percent of the country if the deal is approved. He dismissed contentions from critics that the deal isn’t necessary to AT&T’s proposal, arguing the firm would deploy next-generation wireless coverage to less than 80 percent of the population if the deal doesn’t go through.
“With this transaction we can and will (build out to 97 percent of the population),” Cicconi said. “It costs a lot to do that, $8 billion, but it’s money we’re willing to invest if this merger is approved. We’re not going to do that otherwise. Period. It’s very simple, it’s binary. If approved we can and will do it, if not we cannot and won’t.”
AT&T has also been pushing back hard against claims the merger would leave them in control of the wireless market along with Verizon by pointing to the FCC’s Wireless competition report, which Cicconi said demonstrated strong competition from local and regional carriers. He dismissed concerns from Sprint that the third-place carrier would be swallowed up following the merger.
“Our competitors aren’t going away. Sprint has 51 million customers,” Cicconi said. “It’s not unusual that your competitors would oppose your merging with somebody.”
Finally, Cicconi said AT&T had been disappointed in the FCC’s decision regarding the Qualcomm review but confident the agency would eventually recognize the two transactions are completely separate and should be considered as such.