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NY AG 'concerned' by AT & T, T-Mobile merger, plans review

Wed, 03/30/2011 - 8:20am
Maisie Ramsay, Wireless Week

New York Attorney General Eric Schneiderman said Tuesday that his office will conduct a "thorough review" of AT&T's planned $39 billion acquisition of T-Mobile USA.

Schneiderman said that his office will analyze the merger for potential anti-competitive effects on consumers and businesses in the state of New York.

T-Mobile's service is a low-cost option for many New York consumers. Schneiderman said he was "concerned" that prices for wireless service may increase if the merger with AT&T goes through.

"The last thing New Yorkers need during these difficult economic times is to see cell phone prices rise," Schneiderman said.

Schneiderman said the impact of the proposed merger would be felt most in areas of the state where consumers already have a limited choice of wireless service providers, such as Rochester, Albany, Buffalo and Syracuse.

The merger of AT&T and T-Mobile would create the largest wireless operator in the country, with a combined customer base of more than 120 million subscribers, surpassing Verizon Wireless, which has about 94 million wireless subscribers.

AT&T and Verizon Wireless will control nearly 80 percent of the U.S. wireless market if the T-Mobile deal goes through, creating a near duopoly on wireless services. Sprint, which has opposed the deal, would be left in a distant third place with 52 million wireless subscribers.

Schneiderman is reportedly not the only state attorney general looking into AT&T's acquisition of T-Mobile. The Wall Street Journal reported today that state attorney generals from Connecticut and Minnesota have also expressed concerns about the deal and plan to review the merger. Neither Connecticut Attorney General George Jepsen nor Minnesota Attorney General Lori Swanson could be reached for comment by press time.

The merger has also attracted attention from lawmakers, and Congressman Ed Markey (D-Mass.) called for hearings on the deal last week.

AT&T has repeatedly defended the deal since it was announced March 20. AT&T has argued that the U.S. wireless market is intensely competitive and claims its merger with T-Mobile will benefit subscribers from both companies.

"The AT&T/T-Mobile merger will improve quality for consumers, provide a near-term solution to impending spectrum exhaust in some markets and expand the availability of LTE to 95 percent of Americans, spurring innovation and economic growth," an AT&T spokesman said yesterday.

AT&T's acquisition of T-Mobile must be approved by both the FCC and the Department of Justice. Neither agency has provided comment, but many analysts believe regulators will require AT&T to divest some of T-Mobile's assets as part of the closing conditions for the deal.

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