Leap opposes AT&T merger

AT&T chief executive Randall Stephenson mentioned Leap three times in his official testimony to the Senate Judiciary Committee this month. 

“Any concern that the wireless industry is or could be dominated by AT&T, Verizon and Sprint merely because they have the largest subscriber bases today should be put to rest by 1Q 2011 results recently reported by MetroPCS and Leap, which together gained more than a million net customers in the last quarter alone,” he said. 

Yet that argument is failing to sell with one party in particular: Leap. 

The company came out strongly opposed to the merger on Tuesday, and sounded a bit incredulous that AT&T keeps citing its success. 

“It’s flattering for them to keep talking us up as a vibrant competition,” said Russ Merbeth, vice president of government affairs at Leap, in an interview with The Hill. “But that doesn’t mean we have the size or scale or market power to be truly effective competition down the line.”

Merbeth said he couldn’t think of any effort AT&T has made to reach out to his company. That’s in the backdrop of cross-country road trips by AT&T’s government affairs team aimed at convincing other industries to support the deal. 

“In all the slideshows they show in Capitol Hill, there are references to Cricket and Leap, but they haven’t been running any of that past us,” Merbeth said. 

Leap came out against the merger in time to file comments at the Federal Communications Commission raising concerns about the deal. Merbeth said the decision came after weeks of scrutinizing how the merger would would affect Leap’s spectrum position and market power. 

Merbeth said he is wary that a mega-wireless company would stifle the innovation that small providers have brought to the marketplace, such as no-contract billing. These offerings would no longer be enough to differentiate small companies, he said. 

“This is going to completely shift the dynamic in the marketplace,” Merbeth said. 

AT&T says that the data is on its side and that a market-by-market analysis shows robust competition in the wireless industry. 

An AT&T spokesman said: “We are confident that regulatory approvals will be obtained after a thorough review of the facts and law, because of the significant consumer, public policy and economic benefits resulting from the transaction and because competition will continue to thrive.”