Fifteen House of Representative Democrat members led by Rep. Heath Shuler from North Carolina have written a letter to President Obama urging him to settle the Department of Justice lawsuit filed against the AT&T/T-Mobile takeover.
“By settling the proposed merger of AT&T and T-Mobile USA, we can put thousands of Americans back to work and promote economic development across the country,” Shuler said. I urge the president to strongly consider the vast benefits this merger will have on job creation and the economy, and quickly resolve any concerns the administration may have with the proposal.”
These fifteen representatives believe that the merger is good for the country, will create jobs and spur the buildout of a nationwide broadband network. The Department of Justice could withdraw its lawsuit if AT&T agrees to divestitures, pricing guarantees or other conditions.
“We recognize that the Department of Justice has intervened in the merger to ensure competitive markets and protect consumers,” wrote lawmakers including Reps. Loretta Sanchez (D-Calif.), Joe Baca (D-Calif.), John Barrow (D-Ga.) and Dan Boren (D-Okla.). “Addressing these concerns through a settlement agreement that ensures robust competition while preserving the job creation, capital infrastructure investment and wireless broadband deployment benefits of the merger should be the Department’s goal.”
While a leaked letter acknowledged that AT&T could build out a nationwide 4G network for less than 1/10th of their buying price for T-Mobile, AT&T has said it will not build out a nationwide network without T-Mobile spectrum. The revelation that it would only cost AT&T $3.8 billion to build out their network is a primary reason for blocking the merger according to consumer advocates arguing that the deal is bad for the industry and consumers.
Sprint was quick to respond with their own statement:
“Make no mistake, AT&T’s proposed takeover of T-Mobile will eliminate tens of thousand of jobs across the country.
The flawed economic study embraced by AT&T and its union ignores what Wall Street investors and the Federal Government have been already been promised: that the overall investment for the combined companies will be substantially reduced if the proposed transaction closes.
At the moment, this matter is before the Courts, not Congress, and we are confident that the Department of Justice decision to prosecute this unlawful transaction is the right one for consumers, for competition, and for the economy as a whole.”
Full Text of Letter To President Obama:
September 15, 2011
The Honorable Barack Obama
President of the United States
The White House
Washington, D.C. 20500
Dear Mr. President:
On September 8th, you came before a Joint Session of Congress and asked us to focus our efforts on solving America’s jobs crisis by working to reduce unemployment, encourage private investment and promote new and innovative technologies that will drive job creation. We agree wholeheartedly, and both the Congress and the Administration should take action immediately to battle our country’s severe economic crisis.
One opportunity rests squarely before you with the proposed transaction between AT&T and T-Mobile USA. We urge the Administration to resolve expeditiously your concerns and approve the proposed merger between AT&T and T-Mobile USA. The current merger proposal embraces the three job creation strategies you have already highlighted.
First, the merger will reduce unemployment. AT&T has announced plans to repatriate 5,000 jobs that are currently being performed overseas. In addition to these 5,000 jobs, a recent study (SITE) has shown that the merger will create somewhere between 55,000 and 96,000 new jobs to integrate the two networks and upgrade facilities.
Secondly, the merger will engender new private investment to deploy wireless high speed Internet access services to 97% of the U.S. population. Coverage of this magnitude will necessitate an additional $8 billion investment from AT&T over and above its current industry leading capital investments.
You recognized the economic importance of these services in your “State of the Union” address to the nation last January, when you said “within the next five years, we’ll make it possible for businesses to deploy the next generation of high-speed wireless coverage to 98% of all Americans.” The proposed merger will virtually achieve that goal – and do so on a faster timetable than you had proposed and without a single dime of taxpayer money.
Finally, the deployment of next generation, wireless broadband is the type of investment in new and innovative technology that will drive job creation for years to come. A recent study by Deloitte predicts that next generation wireless broadband buildout by the wireless industry will create 371,000-771,000 jobs and GDP growth between $73 billion and $151 billion by 2016. AT&T’s proposed merger commitment to make available this new technology to 98% of the nation’s population will be a key component of the industry buildout.
We recognize that the Department of Justice has intervened in the merger to ensure competitive markets and protect consumers. Addressing these concerns through a settlement agreement that ensures robust competition while preserving the job creation, capital infrastructure investment and wireless broadband deployment benefits of the merger should be the Department’s goal.
We urge you to encourage resolution of this matter in a timely fashion and appreciate your consideration of our concerns.
Member of Congress