Sen. Franken urges government to stop AT&T merger

{mosads}”It would concentrate enormous power over the entire telecommunications sector in the hands of only two companies and it would incentivize AT&T and Verizon to coordinate prices to the detriment of consumers,” he added.

“This transaction is not in the public interest. If approved, it would result in greatly reduced competition, the potential loss of thousands of jobs, higher consumer prices, and less innovation in technology.”

“We did not expect to pitch a shutout when it came to endorsements for our merger. But it is very clear that the few opposing voices are far outweighed by the enormous depth and breadth of support we are seeing,” said AT&T senior executive vice president for external and legislative affairs
Jim Cicconi.

Cicconi pointed to statements of support for the merger from 26 state governors, 72 mayors and 77 House Democrats, along with civil-rights organizations, high-tech firms and most of the organized labor movement.

Franken compared AT&T’s pledge to deploy next-generation wireless broadband nationwide if the merger is approved to the 1913 Kingsbury Commitment, which was meant to facilitate competition among local phone carriers.

He said AT&T’s conduct during the era of the Ma Bell phone monopoly shows consumers suffer if power is concentrated in the hands of a single company.

Franken also noted that AT&T has managed to reacquire four of the seven companies it was forced to divest during the antitrust suit in 1984 that broke up Ma Bell.

He said AT&T was asking the government to ignore history when approving the transaction, which would leave Sprint in a distant third place and ripe for a takeover.

Franken echoed and expanded many of the arguments laid out by Senate Antitrust subpanel Chairman Herb Kohl (D-Wis.) last week when he became the first senator to publicly oppose the merger.

Franken’s letter argues the wireless market is national in nature and that AT&T’s claims of robust local competition in the largest markets don’t pass muster. He also notes T-Mobile is a low-cost leader and says the firm’s elimination will lead to higher prices for consumers.

Franken also estimates the merger will result in thousands if not tens of thousands of layoffs, despite AT&T’s claims to the contrary. He argues cutting jobs must account for a substantial portion of the operational savings and “cost synergies” promised by AT&T as part of the merger.

Franken commended AT&T for being the only wireless company with a unionized workforce, though he said that didn’t justify approving the merger.

In an unusual argument, Franken also claimed the merger would undermine the principle of net neutrality “because it would place de facto control of our nation’s information infrastructure in the hands of only two companies.”

He noted the FCC’s net-neutrality rules apply to wireless devices in a very limited fashion and cited AT&T and Verizon’s supports for “proposals designed to block net neutrality” and their court challenges of the FCC’s rules.

—This post was updated at 5:26 p.m.