AT&T says merger is key to faster, better wireless network

April 22, 2011
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WASHINGTON — Aiming to sway regulators who must approve its mega-merger with T-Mobile USA, ATT Inc. said Thursday the deal would allow it to expand high-speed wireless broadband to 55 million more Americans than it otherwise could.

In a filing with the Federal Communications Commission, Dallas-based ATT said the acquisition would allow it to deploy 4G LTE service to more than 97 percent of Americans — up from the 80 percent planned before the deal was announced.

The merger would “promote, not diminish competition,” improve existing service for wireless customers, and help accommodate the growing demand for wireless data usage, the company said.

“That means fewer dropped calls, fewer call attempts, and greater data throughput,” said Joan Marsh, ATT’s vice president for federal regulatory affairs.

Sprint speaks out

While ATT put its best spin on the deal, rival Sprint Nextel Corp. asked the FCC to reject it. Consumer groups and some Internet companies are also likely to petition the FCC to oppose the deal.

Sprint said the merger would create a market dominated by ATT and fellow giant Verizon Wireless. Sprint, the nation’s third-largest carrier, said the merger would result in fewer choices for consumers and would give ATT power to “increase prices, threaten innovation critical to this industry and eliminate American jobs.”

“This proposed takeover cannot be fixed with conditions or divestitures,” said Vonya McCann, Sprint’s senior vice president for government affairs. “We believe the facts and the law dictate this transaction must be blocked, and we are confident that the Department of Justice and FCC will determine that this takeover is not in the interest of the American public.”

Sprint was widely believed to be the leading candidate to acquire T-Mobile before ATT stepped in. Sprint criticized the deal almost as soon as it was announced, but Verizon Wireless has stayed out of the debate.

ATT chief executive Randall Stephenson has said he expects the deal to be approved. The company thinks some conditions will be attached to approval, although it suggested Thursday that they would be limited.

“I don’t think you can say the sky is the limit in terms of divestitures here,” said Gary Phillips, general attorney and associate general counsel at ATT.

The review of the merger is being conducted by the FCC and the U.S. Department of Justice’s antitrust division. The FCC must determine whether the merger would help or hurt competition, and whether it would result in new technology and services for consumers.

T-Mobile’s 34 million existing customers would be able to keep their current pricing plans after the merger closes, ATT said in the application.

In the FCC filing, ATT went out of its way to praise Sprint and other carriers as fierce competitors with excellent phones and bountiful spectrum holdings, while noting that T-Mobile was losing customers and had no clear plan to upgrade to 4G.

Competition concerns

The goal is to convince regulators that competition will remain strong even if a faltering T-Mobile is swallowed up.

While regulators analyze the economic arguments, ATT is also likely to make its case directly to consumers and politicians.

The application plays up the merger’s ability to meet President Barack Obama’s goal of expanding high-speed wireless to every American. And ATT has enlisted support from politically influential unions, including the AFL-CIO and the Communications Workers of America, that are important to Democrats.

ATT officials wouldn’t commit Thursday to maintaining all the jobs involved if the deal is approved. But in the past, ATT has relied on “natural attrition,” not layoffs, to reduce its workforce after a merger, Marsh said.

Spectrum control

Part of the FCC’s review will involve looking at how much spectrum, or wireless airwaves, would be concentrated in the hands of the combined company.

ATT rolled out some of its arguments addressing that point. It said the FCC’s current test doesn’t “count everything it should count,” including spectrum controlled by LightSquared, which is building a satellite-based, wireless broadband network.

ATT says the merger is the only way to address the shortage of spectrum that carries huge amounts of voice traffic and data. Marsh said it would take eight years for ATT to build out the number of cell towers it would acquire from T-Mobile, and that’s only if the company could get the permits and other approvals needed to build them.

ATT said it would confront “spectrum exhaust” for 3G service in some markets by 2013. The addition of T-Mobile’s cell sites to its network would double “the amount of network traffic that can be carried using existing spectrum,” Marsh said.

“This will clearly address those immediate needs,” she said.

Staff writer Victor Godinez contributed to this report.

Article source: http://www.dallasnews.com/business/headlines/20110421-att-says-merger-is-key-to-faster-better-wireless-network.ece The feed :

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