AT&T’s proposal discussed opportunities to bring 3G and next-generation LTE network speeds to almost 90% of its (and hitherto T-Mobile’s) customers, and the creation of jobs required to meet that goal.we surveyed the arguments presented by AT&T about its desire to purchase for $38 billion.
But AT&T fumbled the ball about as soon as the play started, as it inadvertently published internal memos noting that reaching about 70% of its customers with faster 3G data networks would be fine, and that such coverage could be had for about $4 billion without the merger. So outright economies of scale seem not to be relevant to the merger. What is?
is given credit for breaking the story on 11 August that a number of passages from an internal review of the merger were released by AT&T that were supposed to be redacted but were not.
This week, FCC and Congress is not (yet) known, AT&T clearly did not expect its buyout to draw such attention and the corporation is now trying to argue that the mass of information it has supplied authorities vindicates it merger proposal.that though the document was not redacted as its notations suggest it should have been, other documents made available demonstrate that some thirty four passages of other parts of the internal review of the proposal were redacted. Though what those redactions actually hide from the
The strategy of AT&T seems to be to overwhelm regulatory authorities with information, yet leave those authorities to sort through the relevant from the (mostly) irrelevant – all in an effort to have the FCC’s commissioners heave a sigh of exhaustion and accept AT&T’s proposal. The strategy is called the ‘,’ a term taken from an early season of South Park.
But, as Daily Tech’s Jason Mick also points out, AT&T has all but admitted that it has no real plan to integrate T-Mobile with AT&T nor did it do much data analysis to come up with the speeds, coverage, or jobs-creation that the merger is supposed to bring about.
Remember how AT&T CEO Randall Stephenson claimed that T-Mobile and AT&T were suffering from “underutilized” networks. Turns out those statements were highly speculative and could be utterly incorrect. Writes AT&T (pg. 8):
AT&T does not maintain in the ordinary course of business a nationwide list of all CMAs where its individual network is underutilized. With regard to the areas where AT&T’s and T-Mobile USA’s networks may be underutilized relative to each other, AT&T does not have this information on a CMA by CMA basis, nor does AT&T have engineering data that would provide this granular information for T-Mobile USA.
One more issue we would like to call attention to is the fact that AT&T argues it will spend $8 billion in infrastructure improvements after the merger, which will also create jobs. Though that argument is true prima facie, T-Mobile had budgeted $18 billion in similar improvements. So the merger would mean a cut in jobs and investments of some $10 billion.
The evidence is mounting that all AT&T really wants is to squelch T-Mobile as a competing network. Though one’s ethical nerves might twinge at such a motive, businesses buy each other out every day – and most of those buyouts end a competitor without endangering capitalism. That said, we’ll see on Friday that many businesses and nonprofits fear this merger as one that could indeed stifle a free and vibrant economy of network providers.