Free Press says AT&T acquisition of T-Mobile is not about spectrum


The #2 telecommunications provider is proposing to acquire the #4 provider for $39B, and #2 AT&T says part of the reason is to satisfy its growing spectrum needs. But Free Press notes that acquisition target T-Mobile is already using most of its spectrum while AT&T sits on unused capacity acquired in television’s digital transition give-back.

According to the Associated Press, Free Press’s Derek Turner said, “”The notion that there’s a spectrum crisis has been greatly exaggerated for (the) political purposes of a few select companies like AT&T.”

The article suggests that AT&T’s real goal is the acquisition of T-Mobile’s customer base for the purpose of upselling standard cell phone users to smartphone plans. The article also suggests that while AT&T’s spectrum demand will continue to grow, it will not expand at nearly the same 80x rate as it has in the recent past, moving more in the 8x-10x range.

Free Press is against the deal on general principles. Turner state, “Don’t believe the hype: There is nothing about having less competition that will benefit wireless consumers. And if regulators approve this deal, they will further cement duopoly control over the wireless market by AT&T and Verizon. A market this concentrated — where the top four companies already control 90 percent of the business, and two of them want to merge — means nothing but higher prices and fewer choices, as the newly engorged AT&T and Verizon exert even more control over the wireless Internet.”

Republican leaders at the House Energy and Commerce Committee said it is appropriate for the FCC to review the transaction, but noted they will be watching. In a joint statement, Fred Upton (R-MI) and Greg Walden (R-OR) said, “We look forward to the ensuing discussion about what this transaction means for consumers, job creation, competition and our evolving communications marketplace. The committee has already expressed interest in examining the Federal Communications Commission’s transaction review process, in light of its dual – and often times conflicting – role to provide both transaction approvals and industry regulations. A proposed transaction of this scale also underscores the importance of an objective review process at the FCC. A key question for this committee is whether the FCC is conducting thorough market analysis and how that influences the agency’s decision-making. We believe such analysis is essential to this and other transactions, and we intend to determine how Congress should reform the FCC’s process going forward.”