Critics Step Up Attacks On AT&T Merger Plans

One of AT&T's arguments for acquiring rival T-Mobile is that the combined companies will help it expand 4G LTE service to the entire country. But critics of the deal point to a document they say contradicts that.

Comm Daily has published a document it says is from AT&T's filing with the Federal Communications Commission (FCC), admitting that expanding its most advanced network to 97 percent of the country would cost an estimated $3.8 billion. But the filing shows AT&T rejected that option, claiming there wasn’t a “viable business case” to justify the expansion.

So why, critics ask, is AT&T willing to spend $39 billion on the T-Mobile takeover — 10 times as much? And the company is committed to paying T-Mobile $6 billion in total compensation if the deal falls through, $2.2 billion more than it would cost to expand its service.

On Friday, the consumer non-profit Free Press said it obtained an AT&T "fact" sheet being used to lure support for the merger. The fact sheet features the claim that the proposed combination of AT&T and T-Mobile is the "rare case where 1 + 1 = 3."

Fuzzy math

Free Press President and CEO Craig Aaron says, not only is it fuzzy math, but AT&T's case for this takeover doesn't withstand scrutiny.

“As the real numbers and facts come to the public's attention, support for this merger continues to unravel,” Aaron said. “ The Department of Justice and the FCC have all the evidence they need to block this dangerous deal.

Aaron claims the real reason AT&T is willing to pay a $39 billion premium for T-Mobile is to kill off the competition.

“It would cost AT&T one-tenth of the merger’s cost to expand its network than to buy up T-Mobile,” Aaron said. “Yet AT&T is willing to pay a 900-percent markup to take out a lower-priced competitor and make sure it can lock in and gouge consumers in the future. The only thing stopping AT&T from expanding its network is greed. One plus one does not equal three, but subtracting one competitor adds up to billions in profits for AT&T and thousands of Americans out of work.”

Largest mobile network

The combination of AT&T and T-Mobile would create, by far, the nation's largest mobile network. Verizon Wireless, currently the largest mobile provider, would be a distant second.

Sprint CEO Dan Hesse has been outspoken in his opposition to the proposed deal, saying if it is allow to proceed, it would not bode well for the U.S. wireless industry.