Or is the merger only promising to be a trust? AT&T has been working through the logistics, regulatory maze, and public-relations (snow?)job for a year or so in its efforts to purchase for $39 million dollars. The merger would make AT&T and Verizon the only major carriers of mobile/4G/LTE networking services in the country. They would carry over 80% of the market and could thus pretty much dictate technology rollouts and regulatory expectations for the industry.
We could trust them to innovate and do the right thing by their customers, of course; seeing as how Federal Communications Commission (FCC) and the American people.. Unfortunately for AT&T, the proverbial cat has escaped the bag: documents unintended for public viewing from within AT&T’s legal team pretty much counter the very case AT&T has been making to the
Publicly, AT&T has claimed that the purchase of T-Mobile will ensure an expansion of AT&T’s 4G/LTE network to some 97% of their customers. Yet the released document clearly states that AT&T’s management (a) need less than $4 billion in investment to make that percentage (far below the $39BN they need to pay to get T-Mobile, thus a far better deal if 97% were their goal) and (2) AT&T does not plan to invest any more than is necessary to reach about 80% of their customers.
Specifically, AT&T senior management concluded that, unless AT&T could find a way to expand its LTE footprint on a significantly more cost-effective basis, and LTE deployment of 80% of the US population was the most that could be justified [to stockholders].
So, like people, corporations lie to suit their interests.
Unlike people, corporations can buy the support they need to ensure their lies gain support. Let’s look at the ledger: GOP Rep. Lamar Smith of Texas has urged the FCC to avoid being swayed by the pressure from Congress (read: some Democrats opposed to the merger). According to a story by PC Magazine:
Though Smith did not issue his support for the merger outright, he did urge the DOJ and FCC to consider several points he believed were not represented in the Kohl and Franken letters, including AT&T’s promise to: improve the quality and capacity of its broadband network, which it said will create jobs; more efficiently use its spectrum; expand its LTE network to 97 percent of Americans; and provide better service to customers, incentivizing rivals to also improve.
Well, we now know AT&T has no intention of reaching 97%, and could do so much more cheaply than buying T-Mobile. And aren’t Republicans supposed to be against the interventions of regulatory commissions and for Congressional oversight?
To be fair, similar trade and/or communications commissions in many states have expressed support for the merger. Seventeen of those states have sent letters signed by Republican governors or Republican-appointed attorneys-general, versus nine Democrats. Just to make it personal: if Jan Brewer of Arizona (anyone found a decapitated head in the Arizona deserts yet?) and Bobby Jindal of Louisiana support anything, I believe we should keep a sharp eye on the facts.
The foundation of their support has been torn asunder by AT&T’s own internal memos and plans, yet the merger still rolls along below the headlines of most newspapers and online portals. Should we be afraid? Next week this blog will review what insiders are saying – and fearing – about just such a merger.