AT&T has officially filed paperwork with the Federal Communications Commission to go forward with their takeover of T-Mobile. The deal has been roundly criticized by consumer and civil rights advocates, who claim that a consolidation of two of the nation's largest mobile carriers could hurt cell phone users -- particularly those of color who rely more on mobile phones to access the Web and have often turned to T-Mobile's comparatively affordable rates. Here's what you should know.
What's in AT&T's filing?
AT&T knows that it's treading tenuous legal ground with the proposed merger, so they're trying their best to paint themselves as the underdog. ArsTechnica summed the filing up nicely, writing that the company's position is basically, "T-Mobile sucks (and we'd like to buy it for $39 billion)." And it's true: AT&T spends nearly 90 pages describing T-Mobile's weaknesses, while detailing the roadblocks it says it'll face if federal regulators don't green light the deal. But Nate Anderson narrows in on the two most important reasons: AT&T wants more public wireless airwaves, called "spectrum," and the towers from which to utilize that spectrum. Despite President Obama's announcement earlier this year of an ambitious plan to auction off the country's wireless airwaves to private companies like AT&T, it's ultimately cheaper and a whole lot faster to gobble up a smaller competitor than got at it alone.
And if the deal doesn't happen? AT&T argues that consumers will be the biggest losers: "Absent a solution to this problem, AT&T's customers would face a greater number of blocked and dropped calls as well as less reliable and slower data connections. And in some markets, AT&T's customers would be left without access to more advanced technologies."
But advocates aren't buying the company's arguments.
"No matter how many high-priced lobbying firms AT&T hires, it won't be able to fool Americans into thinking the reconstitution of the Ma Bell monopoly is a good thing," Free Press Research Director S. Derek Turner said in a written statement. "Make no mistake, this deal is about eliminating a competitor and nothing more. AT&T has chosen the marketing slogan 'Mobilize Everything' to sell this competition-killing deal, but it's clear their real goal is to 'Monopolize Everything.'"
Curiously, AT&T's filing didn't include suggested regulations, notes the National Journal. While it's not exactly standard practice for companies to outline the rules they want to follow, it's proved useful on more than one occasion. Verizon offered up suggested rules that the FCC turned out to be way too eager to fall in line with, and the same proved to be true for the hotly contested Comcast-NBC Universal deal, which was approved after both companies offered up some pro-consumer commitments to help stave off concerns about all the other ugly stuff. Joan Marsh, vice president of federal regulatory with AT&T, told the Journal that it's simply "way too soon" to speculate about regulatory framework, a job that should be left up to the FCC and the Department of Justice. Yet the company has already proved itself to be staunchly opposed to net neutrality regulations, and was among the first to publicly criticize the FCC's net neutrality rules last December.
AT&T' faces an uphill battle, but if the FCC approves the $39 million deal, it'll likely mean the unheralded return to prominence of the former Ma Bell monopoly that ruled American telecommunications for most of the twentieth century. In an interview with the Washington Post's Cecilia Kang, AT&T's vice executive vice president of external affairs, John Cicconi, argued against claims that the merger would turn the telecom market into a duopoly with chief competitor Verizon. "We'll have about 43 percent of the market, but we won't likely keep all those customers," Cicconi told Kang.