The US Senate Judiciary Committee’s antitrust subcommittee grilled AT&T’s CEO Randall Stephenson about his company’s bid to takeover number four wireless carrier T-Mobile USA. Senator Al Franken, who took Google and Apple to task about mobile privacy yesterday, said the deal would allow AT&T to raise prices and “cut thousands of jobs.”
The merger of the nation’s second-largest and fourth-largest mobile carriers would give AT&T a 43 percent share of the U.S. mobile market, said Senator Herb Kohl, a Wisconsin Democrat and subcommittee chairman. AT&T and Verizon Wireless would share about 80 percent of the market, he said.
T-Mobile argues that without the merger of the two companies, they won’t have the resources to sufficiently invest in their 4G LTE network. This is despite the fact they currently run ads bragging about having the nation’s largest 4G network.
Gigi Sohn, a consumer rights advocate on AT&T’s inefficient use of its wireless spectrum:
There is no spectrum shortage in rural America. AT&T is planning to spend $39 billion on this merger, money that could instead be spent investing in its network and bringing better service to more Americans.
Sprint CEO Dan Hesse complained that his company, currently the third largest US carrier, would have difficulty competing if AT&T’s takeover is allowed. He noted that Sprint Nextel would become a takeover target which would reduce competition further.
AT&T and Verizon controlling 80 percent of the market would create a duopoly while Sprint Nextel and the other relatively insignificant regional carriers are left to pick over the scraps. Like Om Malik, I can’t think of any good reason to allow this merger to go through. Sadly, I think it will.