AT&T, FCC clash over merger report
AT&T has come out swinging against the FCC's scathing report on its merger with T-Mobile USA, calling the agency's analysis "obviously one-sided" in a Thursday post on its official blog .
"The document is so obviously one-sided that any fair-minded person reading it is left with the clear impression that it is an advocacy piece, and not a considered analysis," AT&T legislative affairs executive Jim Cicconi wrote.
Cicconi accused the FCC of being biased against the deal, stating the report "raises questions as to whether its authors were predisposed."
"The report cherry-picks facts to support its views and ignores facts that don't," he wrote.
The FCC defended itself, saying it had conducted its review of the deal "dispassionately."
"The AT&T/T-Mobile merger would result in the single-greatest increase in wireless industry consolidation ever proposed," an agency spokesman said. "The FCC's expert staff dispassionately analyzed all of the facts, including the arguments AT&T rehashes today. … The objective analysis concluded, like that of the Department of Justice and multiple state attorneys general, that the transaction would decrease competition, innovation and investment and harm consumers."
The FCC analyzed more than 200,000 documents over the course of its review of the mega-merger, including many filings that have been kept confidential.
AT&T supported its allegations of bias with a blow-by-blow defense of the most damaging parts of the FCC's report, namely its analysis of the merger's impact on jobs, broadband deployment, spectrum and competition.
The FCC questioned AT&T's pledge to expand its LTE network to an additional 55 million Americans in rural areas if the merger went through. The agency found that competitive pressures would force AT&T to deploy its network in those rural areas even without the acquisition.
AT&T said the FCC's assessment showed "logical inconsistency."
"The report apparently assumes a high-enough level of competition exists in rural areas to compel billions of dollars in investment. Yet the report elsewhere argues that the level of wireless competition in more populated areas of America is so fragile that the merger must be disallowed," Cicconi wrote. "At the very least, these conclusions show a logical inconsistency."
The merger's impact on jobs has been an ongoing point of contention between AT&T and the FCC, with AT&T claiming the merger would create jobs and the FCC claiming it will result in huge layoffs.
AT&T has repeatedly claimed that the expansion of its LTE network would create jobs and has made commitments to keep call center employees and some other workers.
AT&T said the FCC's analysis ignores the benefit of its broadband investment and unfairly dismisses its plan to repatriate 5,000 outsourced call center workers and find new positions for T-Mobile's non-management employees.
The FCC maintains that the merger would lead to a net decline in employment. The agency spokesman said AT&T's own confidential filings show the deal would lead to "massive" job losses.
AT&T has said the deal will result in "synergies" but has not publicly specified that those synergies equate to layoffs. Most large mergers entail layoffs as companies cut redundant job functions.
The FCC's analysis of T-Mobile also came under attack. The agency called the country's fourth-largest operator a "disruptive" competitor in its report, but AT&T framed the company as a customer-losing carrier with no path to LTE facing a loss of funding from its parent company.
Contrary to the FCC's findings, T-Mobile won't be investing heavily in its network, AT&T said.
AT&T also went after the FCC for discounting its spectrum shortage and called its conclusion that the merger would result in an unprecedented concentration of spectrum "inaccurate."
"This is simply inaccurate based on the FCC's own published data, which clearly shows that Sprint-Clearwire has more spectrum today than the combined company would have post-merger," Cicconi wrote.
Finally, AT&T slammed the FCC for finding the merger would severely impact competition, saying it "willfully ignores critical facts about the wireless market."
As evidence, AT&T cited competition from regional operators like U.S. Cellular, Leap and MetroPCS; an FCC report which found that 90 percent of Americans can pick from at least five different wireless providers; and the spectrum holdings of regional providers.
"The report treats companies such as Leap and MetroPCS, which have gained market share over this same time period, as though they do not even exist," Cicconi wrote.
The back-and-forth between AT&T and the FCC comes as the operator is scrambling to find a way to save its acquisition of T-Mobile. AT&T withdrew its FCC application for the deal last week to avoid an administrative hearing and focus on reaching a settlement with the Justice Department. The rumor mill has been buzzing with potential ways to salvage the transaction, including selling off as much as 40 percent of T-Mobile's assets to Leap Wireless International or forming a joint venture with Deutsche Telekom.