Groups ask US agencies to reject AT&T, T-Mobile deal

The merger will hurt the U.S. tech industry, the CCIA's Ed Black says

Two U.S. agencies reviewing AT&T's proposed acquisition of T-Mobile USA should reject it because it's anticompetitive and will hurt consumers and the U.S. tech industry, three antitrust experts said Tuesday.

The deal is "about the most brazen merger proposal in history," said Ed Black, president and CEO of the Computer and Communications Industry Association (CCIA), a trade group that has pushed for strong antitrust enforcement in the tech industry.

The merger, of the second- and fourth-largest mobile carriers in the U.S., would hurt mobile software vendors, equipment vendors, operating system developers and other tech companies, Black said during a press briefing. "It is the view of most of the tech industry that innovation ... is driven by competition," he said. "This is of great importance to a lot of companies."

The merger would shrink the U.S. mobile market from four to three national competitors, with T-Mobile, the "low-cost leader," swallowed up by AT&T, added Richard Brunell, director of legal advocacy at American Antitrust Institute (AAI), a think tank focused on strong antitrust enforcement. The U.S. Department of Justice and U.S. Federal Communications Commission will reject the deal if they follow U.S. antitrust precedence, he said.

The deal is "presumptively anticompetitive," added Allen Grunes, chairman of the Antitrust Committee of the Bar Association of the District of Columbia and member of AAI's advisory board.

T-Mobile was the first U.S. mobile carrier to embrace the Android operating system, Black noted. Without T-Mobile, Google's mobile operating system may have never gained a foothold against competitors, he said.

AT&T has said the merger will help alleviate a spectrum crunch it has, but Grunes said he's "skeptical" about those claims. AT&T has other options to address its spectrum needs, he said.

AT&T defended the $39 billion deal, announced in March. AT&T has urged the DOJ and FCC to look at the mobile industry at the local market level, instead of the national level, because of competition from regional carriers.

"We are confident that regulatory approvals will be obtained after a thorough review of the facts and law, because of the significant consumer, public policy and economic benefits resulting from the transaction and because competition will continue to thrive," an AT&T spokeswoman said Tuesday.

Also supporting the merger is Microsoft, maker of the Windows Phone 7 operating system. "We view [the merger] as the type of step that will help build out broadband capability and capacity across the country," said Brad Smith, Microsoft's general counsel and senior vice president for legal and corporate affairs.

Increased bandwidth on broadband networks is a major policy goal of Microsoft's, Smith said during a briefing Tuesday.

Grant Gross covers technology and telecom policy in the U.S. government for The IDG News Service. Follow Grant on Twitter at GrantGross. Grant's e-mail address is grant_gross@idg.com.

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Tags antitrusttelecommunicationT-Mobile USAmobileRichard BrunellAllen GrunesEd BlackBar Association of the District of Columbiaat&tMicrosoftBrad SmithlegalU.S. Federal Communications CommissiongovernmentComputer and Communications Industry AssociationU.S. Department of Justicebusiness issuesMergers / acquisitionsAmerican Antitrust Instituteregulation

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Grant Gross

IDG News Service

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