A 157-page report from the Federal Communications Commission indicates that AT&T’s proposed $39 billion buyout of T-Mobile would drastically reduce competition in the wireless market and have a negative impact on jobs.
In fact, the report indicates that that a merger of AT&T and T-Mobile would lead to anti-competitive impacts in 99 of the biggest 100 markets.
In a statement, FCC Chairman Julius Genachowski said that “competition is the engine of our free market economy and a cornerstone of the FCC’s mandate.”
“Our review of this merger has had a clear focus: fostering a competitive market that drives innovation, promotes investment, encourages job creation, and protects consumers,” he continued. “These goals will remain the focus if any future merger application is filed.”
Meanwhile, AT&T is taking aim at the report, questioning why it was released.
“It has no force or effect under the law, which raises questions as to why the FCC would choose to release it,” AT&T senior vice president Jim Cicconi said in a statement to Politico.
On Thanksgiving Day last week, AT&T and T-Mobile’s parent company, Deutsche Telekom, dropped their their FCC application for approval of the merger. That decision came as the FCC said that it would hold an administrative hearing to look into the deal.
The U.S. Justice Department in August sued to block the deal, saying that “AT&T’s elimination of T-Mobile as an independent, low-priced rival would remove a significant competitive force from the market.”
In a statement, FCC Commissioner Mignon Clyburn agreed that the deal would hurt competition. Clyburn said:
My concern that the proposed merger could substantially lessen competition in the mobile wireless service market begins with what I see in the current state of the market. Increased consolidation, over the past several years, has resulted in fewer regional and rural service providers that are able to discipline the largest carriers. Voice and data roaming and other network sharing agreements would stimulate the deployment of networks to more Americans, but the denial of these agreements and those opportunities would prevent the smaller carriers from providing competitive service offerings to their subscribers, resulting in pockets of this Nation not being robustly served. In fact, the most recent 15th Mobile Services Report finds that more than seven million Americans still live in rural census blocks with two or fewer mobile service providers. In addition, more than 37 million Americans live in rural census blocks that have two or fewer choices when it comes to mobile broadband services. It may be that this current state of affairs calls for the Commission to adopt more regulation to better implement the public interest aims of the Communications Act.
Meanwhile, here’s the redacted version of the report from the FCC.