Franken: Just say 'no' to AT&T buy of T-Mobile USA

Sen. Al Franken (D-Minn.) has asked the Federal Communications Commission and Department of Justice to reject the proposed acquisition of T-Mobile USA Inc. (DTEGY) by AT&T Inc. (T)
Franken joins Sen. Herb Kohl (D-Wis.), chairman of the Senate Judiciary antitrust subcommittee, in calling for the federal agencies to reject the proposed $39 billion merger. The FCC last week said it needed more time to review the matter.
Franken said the potential merger would effectively result in a duopoly, with AT&T controlling 43% of the market and Verizon Wireless controlling 39% of the market. Sprint Nextel Corp., Franken speculated, would not be able to keep its 15% marketshare.
“In terms of their 4G strategies, AT&T and Verizon have both committeed to LTE technology, while sprint is committed to WiMAX. With T-Mobile removed from the equation, this means that once the companies’ 4G rollout plans are complete, the U.S. market would be entirely LTE except for Sprint, which would place Sprint at a significant disadvantage. Handset manufacturers and technology innovators would not be interested in developing hardware that only Sprint could use and Sprint’s customers would face significant problems when travelling because their handsets would be technically unable to roam on other networks. In addition to these disadvantages, AT&T and Verizon would be in a very strong position to use their superior resources and spectrum to push Sprint out of the business,” Franken said.