Tong Zhang
(Senior Editor)
06/01/11 02:11 PM
Sprint Requests FCC to Deny Merger That Harms Consumers

Sprint today issued a formally request to FCC to block ATT's proposal to takeover T-Mobile USA. The statement makes some very good points. Here is more:

Sprint made the request in a "Petition to Deny" filed at the FCC this afternoon. In its filing, Sprint concluded the proposed acquisition cannot be remedied through divestitures or conditions, and urged the FCC to block the proposed transaction on the following grounds:

-The proposed T-Mobile takeover would harm the broadband economy, competition and consumers. It would reverse two decades of successful U.S. government wireless competition policy and result in higher prices for consumers in the absence of marketplace choices.

-The proposed T-Mobile takeover would harm innovation and investment. Approval of this transaction would uniquely position the Twin Bell duopolists of AT&T and Verizon as the gatekeepers of the digital ecosystem, stifling innovation and choice in new devices and applications, and the capital markets that fund them.

-The proposed T-Mobile takeover has no public interest benefit. The transaction would do nothing to relieve AT&T?s purported spectrum congestion. AT&T is already the largest holder of licensed spectrum and unused spectrum and has simply failed to upgrade or invest sufficiently in its network. Moreover, AT&T does not need T-Mobile to expand its LTE network to reach 97 percent of all Americans, because its current spectrum holdings and network already reach approximately 97 percent of the population.

In effect, AT&T is simply seeking a government bailout for problems of its own making and expects the cost of the bailout to be shouldered by American consumers. Instead of paying Deutsche Telekom $39 billion, AT&T could invest a fraction of that amount to expand its LTE deployment to nearly all Americans. But rather than respond to the market demands of a competitive industry, AT&T has chosen to eliminate competition and transform a competitive market into a duopoly.

In its filing, Sprint states that the choice is very clear: The proposed transaction must be blocked. The transaction would harm consumers, competition and the American economy as the Twin Bells would not be deterred from increasing prices and reducing consumer choice in wireless devices, applications and services where they control approximately 80 percent of the wireless industry revenue. The proposed transaction would produce no tangible public interest benefits and would impose serious anti-competitive harms that cannot be remedied through divestitures or conditions. The Commission should reject the acquisition outright.


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(Moderator and writer)
06/01/11 06:06 PM
Re: Sprint Requests FCC to Deny Merger That Harms Consumers

I would find this a lot more compelling if it weren't for the fact that Sprint has seemingly gone out of its way to show that they don't care about their own customers, let alone consumers in general. Considering their poor customer service record and occasional tendency to simply cancel customers deemed too "difficult," sometimes I almost think they are trying to lose subscribers.

I don't think Sprint's interest in blocking the merger has anything to do with protecting consumers - I think it is really about protecting Sprint. That may still be a valid concern, but disguising it as being for the common good is a little sneaky.

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