Today marked the second hearing by members of Congress regarding the proposed acquisition of T-Mobile by rival AT&T held before the House of Representatives’ subcommittee on intellectual property, competition and the internet. AT&T CEO Randall Stephenson stuck to his message that this deal was “all about consumers” which was of course rebutted quite frequently by other members of the panel. Parul P. Desair of Consumers Union stated that the merger “would result in a highly concentrated market, which will likely lead to higher prices and fewer choices for consumers.”
While the House panel has no direct say on the approval process for the deal, there was quite a bit of skepticism that the deal would actually do what AT&T pledges to do. “There are legitimate questions about whether this merger could move this market past the anticompetitive tipping point,” said Representative Bob Goodlatte, Virginia Republican.
Representative John Conyers, Michigan Democrat all but dismissed AT&T’s arguments and argued that the potential cost in terms of lost jobs, innovation and smaller competitors outweigh any proclaimed advantages. “Everything that we’re talking about that’s so great from this merger is really already accomplishable…I see absolutely no redeeming reason for this merger.”
Conyers went on to say that “I am concerned that this merger is bad for consumers, bad for business and bad for innovation…Mergers always eliminate more jobs than they create. There is every likelihood that the proposed acquisition of T-Mobile by AT&T could lead to both higher prices and decreased consumer choices.”
Stephenson continued to argue that T-Mobile wasn’t a direct competitor of AT&T regardless of all the facts presented to rebut that point. Continued focus on T-Mobile’s current ad campaign featuring shots at AT&T’s network quality were brought into question as to how T-Mobile could consider AT&T a nationwide competitor without the reverse being true?
The great news is that there are no sign Congress is taking this issue lightly and while we continue to wonder whether or not these hearings are just for show or hope to actually influence the decision of the FCC and DOJ. Today was a bright day for those who wish to see this deal put to rest as we saw continued pressure placed on AT&T and Detusche Telekom executives to further explain how they feel this deal benefits consumers and not just their bottom lines.
Reuters, Ars Technica, Consumerist