AT&T is expected to face some difficult questions Wednesday on Capitol Hill over its proposed $39 billion acquisition of T-Mobile USA.
AT&T will appear before a subcommittee of the Senate Judiciary Committee in a hearing that is likely to focus on the mergers effects on competition and consumers. The hearing will be held at 10:15 a.m. before the Subcommittee on Antitrust, Competition Policy and Consumer Rights.
AT&T President and CEO Randall Stephenson will testify, and T-Mobile USA President and CEO Phillip Humm also is a witness.
But lawmakers are certain to receive mixed opinions on a merger that would wipe out T-Mobile USA, the fourth-largest U.S. mobile operator that has been struggling to compete with its larger rivals.
AT&T rival Sprint Nextel, which has strongly opposed the merger, will have a voice at the hearing since its CEO Daniel Hesse will appear before the subcommittee.
Other witnesses include Victor H. Hu” Meena, president and CEO of Cellular South, Inc.; Gigi Sohn, president and co-founder of Public Knowledge, a Washington, D.C.-based public interest group; and Larry Cohen, president of the Communications Workers of America, the telecommunications union.
The merger of AT&T and T-Mobile threatens to undo what Congress so wisely initiated in 1993 and return the United States to a duopoly market marked by higher prices and less innovation,” stated Sohn of Public Knowledge in her prepared remarks that she released ahead of the hearing. If this merger is consummated, two vertically integrated companies will control nearly 80 percent of the wireless market, and leave Sprint, with just 16 percent of the market, considerably weakened.”
But in a research paper released Monday, the Communications Workers of America (CWA) contends that T-Mobile USAs parent, Deutsche Telekom, determined to stop investing in the mobile operator, leaving few options for the Bellevue, Wash.-based wireless provider.
There are four facts that are brought to light here. First, DT was seeking a buyer,” said CWA Senior Director George Kohl. Second, AT&T or Sprint were the two leading suitors. Third, merging with Sprint would be technologically and financially burdensome and finally, AT&T is the best option for consumers and workers.”