Aspiring wireless monopoly AT&T is outraged that the Federal Communications Commission unfairly released a staff analysis of the company's proposed $39 billion purchase of smaller rival T-Mobile USA.
Here's AT&T's complete response to the FCC's report:
"The FCC has recognized that it is required by its own rules to dismiss our merger application. This makes all the more troubling their decision to nonetheless release a preliminary staff report on the merger. This report is not an order of the FCC and has never been voted on. It is simply a staff draft that raises questions of fact that were to be addressed in an administrative hearing, a hearing which will not now take place. It has no force or effect under law, which raises questions as to why the FCC would choose to release it. The draft report has also not been made available to AT&T prior to today, so we have had no opportunity to address or rebut its claims, which makes its release all the more improper."
To AT&T, the "troubling" and "improper" release of a "staff draft" that has "no force or effect under law" actually "raises questions as to" the FCC's motives, which by implication are dark and ignoble.
Indeed, AT&T would love nothing more than to change the topic of the debate from the impact its merger would have on the U.S. wireless market to the nefarious motives of the meddling, anti-business federal government that wants to stifle job growth, innovation and customer choice. For some reason. Oh yes, because they're anti-business. (And maybe socialist.)
And that's because the deal's impact on U.S. wireless customers would be negative, as it always is when a market is controlled by one or two companies. Should the T-Mobile purchase go through, AT&T and Verizon together would own about 80% of the U.S. wireless market, and No. 3 Sprint Nextel -- already burdened with steep losses and debt -- essentially would be doomed.
That's way past any tipping point, as the FCC reports argues. Here's < href="http://www.fcc.gov/document/commissioner-clyburns-statement-att-t-mobile-proceeding">FCC Commissioner Mignon Clyburn:
The staff’s findings suggest the applications (from AT&T) appear to substantially lessen competition in ways that no conditions would appear to remedy.
The FCC report is 109 pages long and lays out in great detail staff concerns about the merger's impact on competition, pricing and innovation. AT&T complains in its response statement that it hasn't had time to "address or rebut" FCC conclusions, but that's irrelevant. The truth is, AT&T can't rebut the FCC's report in any way other than to reiterate its arguments in favor of the T-Mobile merger, arguments the FCC already has rejected.
Rejected for good reason, too. No rational, objective person not on the AT&T payroll could possible conclude that eliminating one of the four national wireless carriers would benefit consumers and the U.S. economy (via more jobs) and foster innovation. AT&T's jobs argument is particularly duplicitous and, to me, sleazy given the unemployment rate in the U.S.
As Clyburn notes in his statement, AT&T's own corporate history shows no record of job growth following mergers. "In 2002," he writes, "there were 70,000 employees at AT&T Mobility and its predecessor companies. Since then, AT&T merged with Cingular, Dobson, and Centennial. Today, there are 67,000 employees at AT&T Mobility."
Either a whole bunch of people retired, or AT&T did what all companies do when there's a merger -- eliminate "jobs serving redundant functions" (to use AT&T's own phrase) in order to cut costs. We can safely assume the latter, just as we can safely assume jobs would be lost -- as they always are -- in the event of the merger with T-Mobile.
The reason the Justice Department is suing to block the merger, and the reason the FCC last week ordered a hearing that could take up to a year -- a move resulting in AT&T withdrawing its application to the FCC --is because no one's buying AT&T's "facts."
Well, AT&T doesn't have any new facts, so now it's going to play the victim game. And spend more on lobbying. The former won't work. Let's hope the latter also fails.