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COMPTEL Asks FCC to Reject AT&T/T-Mobile Merger

AT&Ts acquisition of T-Mobile USA will leave AT&T as the only national provider of Global System for Mobile (GSM) technology, paving the way for the telecommunications giant to unilaterally set the rates that smaller wireless providers pay for roaming access, according to a trade organization in a filing Tuesday asking the Federal Communications Commission to reject a merger that it claims is not in the public interest.

Smaller GSM wireless providers will be dependent on AT&T for roaming arrangements in order to provide their customers with nationwide, seamless connectivity and will be subject to the rates, terms and conditions that AT&T dictates,” asserted COMPTEL, the trade group whose members include AT&T rival Sprint Nextel.

The FCC adopted an order in April that requires facilities-based providers of commercial mobile data services to offer data roaming agreements to other providers on commercially reasonable terms and conditions. (Verizon Wireless has appealed the order). But COMPTEL contends in its filing that it is not possible to negotiate commercially reasonable terms and conditions in a monopoly environment because there is no basis for competition.”

In a statement issued Tuesday, Rural Cellular Association (RCA) President and CEO Steven Berry declared that AT&Ts $39 billion acquisition of T-Mobile USA would only further impair smaller competitive carriers especially GSM carriers trying to negotiate voice and data roaming agreements and obtain the most up-to-date devices.”

COMPTEL also implied that AT&T, post-merger, could use its position as the largest provider of special access services to raise its competitors costs for backhaul traffic from cellular sites to the public switched telephone network. AT&Ts indication that it plans to move T-Mobiles backhaul traffic onto its own network also would prevent competitive providers of special access services from serving T-Mobile, according to the filing.

In a blog posting last month, an AT&T executive, Bob Quinn, noted that T-Mobile doesnt provide special access services and indicated that the nations fourth-largest mobile operator has been moving away from reliance on landline special access services.

 

What this means is that this merger has absolutely no impact on the issue of special access/wireless backhaul,” Quinn said.

In the FCC filing, COMPTEL also asserted that AT&Ts need for spectrum one of AT&Ts often-cited rationales for the merger is not unique to the company.

The FCC must address the spectrum issues for the industry as a whole,” COMPTEL stated, not by approving a transaction that will provide relief for AT&T alone.”

Concluded COMPTEL: Because AT&T and T-Mobile have failed to demonstrate that any public interest benefits from the acquisition will outweigh the significant competitive harms, the Commission must deny AT&Ts application to acquire T-Mobile.”

In a 377-page filing Tuesday, AT&Ts competitor Sprint also asked the FCC to reject AT&Ts application to acquire T-Mobile USA from Deutsche Telekom AG for $39 billion in cash and stock.

The pending merger between AT&T the nations second-largest wireless operator and T-Mobile USA the fourth-largest wireless provider has proved to be controversial since the deal was announced in March.

But AT&T has said the merger has garnered plenty of support, including from governors in 14 states ranging from Colorado to Maine.

As of Tuesday afternoon, there were more than 300 filings in support of the merger, wrote AT&Ts Jim Cicconi in a blog posting.

Lets keep in mind that the standard under which the FCC operates is whether a merger is in the public interest,” Cicconi wrote. The answer from elected officials and respected state and national organizations from every walk of life is a resounding yes.”

Opposition to the merger, Cicconi added, is unsurprising, underwhelming, and unpersuasive.”


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