Sprint Nextel Corp. on Tuesday gave the Federal Communications Commission plenty to chew on when reviewing AT&Ts $39 billion acquisition of T-Mobile USA 377 pages worth.
The nations third-largest wireless provider asked the FCC to deny the transaction, asserting that regulators cannot solve the mergers harmful effects on competition by simply imposing conditions or requiring divestitures.
If approved, the merger would enable just two operators AT&T and Verizon Wireless to control most of the U.S. wireless market, according to Sprint.
The transaction would make AT&T the nations largest wireless carrier with 118 million subscribers in total and 43 percent of the post-paid market,” Sprint asserted in the public filing. Coupled with Verizons more than 94.1 million total subscribers and 39 percent of the postpaid market, the transaction would create a Twin Bell monopoly with 82 percent of post-paid subscribers, over 78 percent of all wireless revenues, and 88 percent of all wireless operating profits.”
Sprint claimed that the merger would stifle innovation, noting that handset manufacturers would be less willing to partner with wireless providers other than AT&T and Verizon Wireless because the two largest operators would have far greater leverage to demand exclusive arrangements or rights of first refusal.”
Overland Park, Kan.-based Sprint also rejected one of AT&Ts biggest rationales for acquiring T-Mobile USA: that it needs spectrum.
AT&T, Sprint declared, doesnt face capacity constraints on its network, but rather holds the largest licensed spectrum holdings among all carriers and has reassured its investors that it has sufficient capacity and spectrum to meet the escalating demand for data services.
Like any other carrier, AT&T can invest in new cell sites of network technologies to maximize efficient use of its spectrum to meet consumer demand for its services,” Sprint stated. AT&T has made the business decision not to do so.”
AT&T has stated that the merger will enable it to reach 97 percent of the population with a fourth-generation network, but Sprint asserted that AT&T already has sufficient spectrum to meet that goal, and to the extent it needs spectrum in a few isolated rural areas, it can acquire spectrum rights to fill the gap.”
The FCC must examine AT&Ts acquisition of T-Mobile USA to see if it is in the public interest. Sprint claims AT&T cant meet the test.
AT&Ts proposed takeover of T-Mobile would not produce any cognizable public interest benefits while giving rise to serious anticompetitive harms that cannot be remedied through divestitures or conditions,” Sprint stated.
In a series of blog postings, AT&T has been defending the merger and responding to criticism from the likes of Sprint.
Sprints claims that AT&T holds the largest amount of spectrum in the industry is odd” considering that Sprints CEO, Dan Hesse, has repeatedly boasted that Sprint has the best spectrum position in the industry,” wrote AT&Ts Joan Marsh. Outside the beltway, Sprint is not hesitant to brag about its strong spectrum position.”
AT&T CEO Randall Stephenson also has defended the merger and articulated its benefits during at least two hearings on Capitol Hill.
With the spectrum and network capacity lift provided by this transaction, AT&T and its partners can continue to develop, introduce and aggressively promote innovative, but capacity-consuming services, devices and applications,” he said last week before the House Committee of the Judiciary, Subcommittee on Intellectual Property, Competition and the Internet.