Sprint Formally Asks FCC to Block AT&T/T-Mo Merger

UPDATED: Third-place U.S. cellular carrier Sprint (s S) filed a petition with the FCC today formally requesting a block of the AT&T-T-Mobile merger saying it would harm consumers, competition and the broadband economy and would produce no tangible public interest benefits. The filing comes after Sprint testified before a Senate judiciary subcommittee meeting earlier this month, where CEO Dan Hesse said the merger would lead to a duopoly controlled by AT&T (s T) and Verizon (VZ).
The filing — which is in response to AT&T’s request to acquire T-Mobile’s U.S. spectrum licenses — is not dramatically different than what Sprint has been saying for some time about the $39 billion acquisition. But it lays out clearly why the company feels the merger is so potentially harmful. Sprint said the deal would not only reduce competition, but also harm innovation and investment and could ultimately mean slower economic growth for the country. And it would not do anything to alleviate AT&T’s spectrum needs; Sprint chided AT&T for mismanaging its resources and said it believes AT&T has enough spectrum holdings to cover approximately 97 percent of the population.
If the merger comes to pass, AT&T and Verizon will control 82 percent of post-paid subscribers, Sprint said. That power of the “Twin Bells” would undermine two decades of wireless innovation, said Sprint, and could harm the ability for other players to compete on pricing or push their pace of innovation. Content owners, along with handset manufacturers, would also be forced to bend to the wishes of AT&T and Verizon because of their combined clout, Sprint said.
“This proposed takeover puts our mobile broadband future at a crossroads,” said Vonya B. McCann, senior vice president of Government Affairs for Sprint said in a statement. “We can choose the open, competitive road best traveled, and protect American consumers, innovation and our economy, or we can choose the dead end that merely protects only AT&T and leads the rest of us back down the dirt road to Ma Bell.”
AT&T has said it needs the deal to extend its plans for LTE coverage to an additional 46.5 million Americans and cover 95 percent of the U.S. And AT&T officials maintain that previous mergers have resulted in lower prices for voice and data. The deal already has the backing of many lawmakers and organized labor, though it faces a chorus of criticism from consumer rights groups and individual consumers. We’ve talked about concerns over the merger and its effect on the industry and innovation. AT&T will have until June 10 to respond while other interested parties will have until June 20 to weigh in. The whole review process could take a year to complete so get ready for more fighting words to come.
UPDATE: AT&T released a statement in support of the merger.
“Strong support for the AT&T-T-Mobile merger has been voiced by dozens of community, civic and minority organizations, 11 governors, multiple labor unions and several members of Congress. We anticipate additional support for the transaction from more voices who recognize the tremendous benefits for the economy, innovation and public policy associated with bringing high-speed wireless broadband deployment to more than 97% of the U.S. population – nearly 55 million more Americans than our pre-merger plans – and improving call quality and network performance for consumers.”