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Mayors Voice Support for AT&T Deal With T-Mobile

More than 100 U.S. mayors have expressed support for AT&T's proposed acquisition of mobile rival T-Mobile USA, AT&T said Wednesday.

The mayors of Miami, St. Louis and Sacramento, California, are among those from 24 states calling for the U.S. Federal Communications Commission and the U.S. Department of Justice to approve the deal. AT&T announced in March that it planned to purchase T-Mobile USA for US$39 billion.

AT&T officials have said the acquisition would help them expand their 4G network to more corners of the U.S. T-Mobile's spectrum will help AT&T improve mobile service to existing customers, and help the company meet a growing demand for mobile data services, the company has said.

The merger will expand the availability, speed and reliability of mobile broadband and will "foster innovation from device makers, apps developers, customers and content creators that did not exist a few years ago," Mayor Francis Slay of St. Louis said in a statement.

Also supporting the deal are 26 governors and 11 state attorneys general, AT&T noted. About 80 members of the U.S. House of Representatives have signed on to letters of support, and regulatory commissions in three states have voted to approve the deal.

Opponents of the deal have said the acquisition would eliminate one of four mobile carriers with a nationwide reach, with T-Mobile often the low-cost competitor to larger carriers.

Opponents have noted that most T-Mobile spectrum overlaps with existing AT&T coverage, leaving questions on how the acquisition will allow AT&T to expand its 4G coverage. Opponents have suggested that AT&T could achieve many of the same goals by spending the $39 billion to improve and build out its existing network.

On Wednesday, Consumer Watchdog released an opposition letter the group wrote to the FCC, DOJ and California officials. AT&T made similar promises of lower prices and better service in its 2004 merger with Cingular, but failed to deliver, the group said in the letter.

AT&T "betrayed its promises" after the Cingular merger, the letter said. The company "abandoned the old AT&T network, deliberately degrading the network so that AT&T customers would be forced to migrate to Cingular's own network, pay an upgrade fee of $18, buy new phones and agree to new and more expensive rate plans. These anti-consumer moves were enforced by an anti-competitive 'early termination fee' of anywhere between $175 and $400, which prevented customers of AT&T from moving to another carrier."

An AT&T spokeswoman disputed the information in the Consumer Watchdog letter. Mobile prices have "declined sharply" in recent years, said spokeswoman Margaret Boles.

"This letter is riddled with distortions and factual inaccuracies," Boles added. "T-Mobile consumers will be able to keep their rate plans for as long as they want to, even when upgrading to a comparable device, once the merger is completed. Further, T-Mobile consumers will not be required to upgrade their phones. "

Grant Gross covers technology and telecom policy in the U.S. government for The IDG News Service. Follow Grant on Twitter at GrantGross. Grant's e-mail address is grant_gross@idg.com.

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