Sen. Al Franken (D., Minn.), is urging regulators to reject the pending AT&T’s merger, joining the Senate’s antitrust chair and other lawmakers in what may be a growing legislative backlash against the deal.
The senator Tuesday sent a 24-page letter to key members of the Federal Communications Commission and Justice Department, claiming the proposed $39 billion merger may affect “consumer prices, customer service, innovation, competition in handsets and the quality and quantity of network coverage.”
Franken’s letter came just a few days after Sen. Herb Kohl (D., Wisc.), who heads the Senate Antitrust Committee, wrote his own report to the FCC, saying he believes the merger violates antitrust laws. Reps. Edward Markey, John Conyers and Anna Eshoo have also written letters against AT&T’s plans.
The letters may be a sign Sprint CEO Dan Hesse’s lobbying efforts are starting to pay off. Hesse is in Washington D.C. frequently to fight against the merger, which he claims will leave his company in a distant third place without the ability to compete effectively enough to catch up.
AT&T and T-Mobile deny the letters reflect the general opinion of lawmakers about the merger, and AT&T says officials and industry leaders are lining up to support the deal. Both companies maintain the merger will deliver higher connection speed, better quality and lower costs for customers.
AT&T says it wants to buy T-Mobile to alleviate its spectrum issues, arguing the merger will allow it to launch its 4G services faster and provide high speed data access to more than 97 per cent of Americans.
Franken, however, said he is sceptical AT&T will live up to those promises. Further, he says AT&T already has more spectrum capability than any other company, and still has problems with dropped service.
His letter also quotes economists from Sprint, which claims the merger would result in AT&T and Verizon splitting up 82 per cent of the wireless market nationwide. Franken states the deal could hinder other companies’ abilities to offer certain phones, interfere with roaming and drive up prices.
Franken also wants the FCC to make AT&T publicly release its plans for any job cuts, because he fears the merger will cause thousands to lose their jobs.
However, T-Mobile disagrees with Franken’s assessment, issuing a statement in response to his letter late Tuesday.
“While we respect Senator Franken, his analysis of our pending transaction is just wrong,” said T-Mobile, going on to argue that the merger will actually improve efficiencies and benefit consumers. “We are confident that a thorough review of the record will demonstrate the transaction advances the public interest.”
The controversy is likely to continue for some time while opponents and supporters line up to voice their opinions, and Franken’s letter is likely not the last one that a legislator will send to the FCC about the merger. However, while the letters may impact public opinion, the FCC has the final say on the issue.