Why MMTC is Endorsing the AT&T / T-Mobile Merger

[Commentary] Since its founding 25 years ago, the Minority Media and Telecommunications Council (MMTC) has been a vocal opponent of consolidation in the media and telecommunications industries. A transaction may be compelling to shareholders or have an attractive economic rationale, but transactions that shrink a sector usually come at the expense of communities of color. Too often, what may appear to be “good” for a company is, in fact, bad for minorities. Thus MMTC has never affirmatively endorsed a proposed merger – until now.

This transaction is fundamentally different from past transactions because of what’s at stake – the future of wireless broadband. Mobile broadband is profoundly important in connecting minorities to the Internet. For 4G to be rolled out in a manner that is both swift and inclusive of minorities, broadband providers will require massive amounts of new spectrum to build 4G networks. The proposed merger of AT&T and T-Mobile would help solve the spectrum crunch by putting this scarce resource to the most efficient and consumer welfare-enhancing uses. According to AT&T, this merger would give it “the scale, spectrum, and resources that will enable it to deploy LTE [its 4G network] to more than 97 percent of Americans, many of them in the rural areas and small towns most in need of greater broadband deployment and economic development.” The transaction would result in better wireless broadband connectivity in very large and disproportionately minority markets like Los Angeles, Houston, Detroit, and Washington (DC).

In the absence of such a solution to the spectrum crunch, carriers may begin to raise prices in order to suppress demand for advanced services. There is another reason to be optimistic and enthusiastic about this transaction: AT&T has a long record of excellence when it comes to diversity and working to inclusion.

Thus the proposed merger warrants a departure from MMTC’s history of opposition to such transactions. The nation has robust wireless and broadband networks. But spectrum resources are quickly running out. The proposed merger of AT&T and T-Mobile is a natural next step in the evolution of the marketplace. Done right, this transaction will be a boon to all consumers.