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Franken: Pull the plug on AT & T, T-Mobile deal

Wed, 07/27/2011 - 8:20am
Maisie Ramsay, Wireless Week

Minnesota Democrat Al Franken yesterday became the second senator in the past week to ask the FCC and Justice Department to block AT&T's mega-merger with T-Mobile USA.

Franken said in a letter to regulators that the deal would stifle competition, cost "thousands" of jobs and raise prices.

"Allowing this merger to proceed would lead to an effective duopoly in the national wireless market that would result in higher prices for consumers and potentially thousands of job losses," he said, adding that "this type of horizontal consolidation does not serve the public interest."

Franken's formal opposition to AT&T's buyout of T-Mobile comes less than a week after Wisconsin Senate Democrat Herb Kohl asked the FCC and DOJ to block the deal.

The lawmaker first voiced concerns about the merger in a May 4 floor statement and expressed skepticism about the deal at a later Senate hearing.

AT&T legislative affairs executive Jim Cicconi said in response that support for the deal far outweighed the opposition, pointing to support from 26 governors, 72 mayors, 77 House Democrats, civil rights groups, technology companies and unions.

"We did not expect to pitch a shutout when it came to endorsements for our merger," he said. "But it is very clear that the few opposing voices are far outweighed by the enormous depth and breadth of support we are seeing."

T-Mobile also defended the deal. Tom Sugrue, T-Mobile's senior vice president of government affairs, said Franken's analysis of the acquisition is "just wrong."

"The combination of T-Mobile and AT&T should be approved because it will deliver what consumers are looking for in the age of smartphones, tablets and mobile Internet – speed, service quality and reduced costs," Sugrue said. "As is documented in our government filings, the combination of our two networks creates significant efficiencies that will trigger strong benefits for consumers."

AT&T says its acquisition of T-Mobile is necessary to meet soaring demand for mobile broadband services. In his letter, Franken disagreed, saying AT&T should have better managed its network and spectrum resources and that the efficiency gains gleaned from the deal would be minor.

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