Public interest groups say AT&T interested in 'expanding their bad service at high prices'

A coalition of public interest groups blasted AT&T's proposed acquisition of T-Mobile USA, arguing the transaction would harm consumers and curtail competition in the wireless market. The groups, which include Media Access Project and Consumers Union, filed a reply with the Federal Communications Commission in response to arguments from AT&T and T-Mobile that the merger would benefit consumers by accelerating the deployment of next-generation wireless access.

"Removing one of three direct competitors with AT&T from the nationwide market — and its only competitor in the GSM submarket — would leave a void that no other carrier is capable of filling," the groups state. "Removing T-Mobile, in particular — a consumer-friendly, price-disciplining, maverick provider of low-cost and innovative mobile wireless products in an increasingly consolidated market — implicates the public interest even more palpably. "No amount of rhetoric or economic gerrymandering of markets can change that fact." The public interest groups claim AT&T has previously resisted investing to improve capacity and deploy next generation wireless networks as competitor Verizon Wireless has done. The groups argue AT&T shouldn't be rewarded by attaching its willingness to build out its network to the government's approval of the merger.

"'Maximizing AT&T's wealth' is not, and never has been, a public interest benefit justifying any merger, much less a legally cognizable merger-efficiency that could justify increasing concentration in an already highly-concentrated industry," the groups state. The filing also notes that under-served groups such as minorities and rural residents tend to rely on wireless broadband service to an even greater degree, and argue that their public interest should trump AT&T's interest "in expanding their bad service at high prices at the expense of competition." The groups note AT&T will not offer T-Mobile's service plans to AT&T customers but will simply honor existing contracts until they expire or customers request an upgrade. They ask the FCC to deny the merger, referring to the telecom giant as a "well-chronicled price hiker and strong-arm tactician."