AT&T/T-MOBILE: should the Congressional Black and Hispanic Caucuses be more visible, and support the merger?

Issue: Could the AT&T/T-Mobile merger actually help minorities?

Lead: One online journal made that argument in September (quote):

Some of the more prevalent arguments against the merger are that it would significantly reduce competition, increase unemployment, raise consumer costs and harm low-income families and minorities the most. However, these arguments are largely unsubstantiated.

Many amateur economists insist the merger would lead to unfair domination of the market. But in its competition report earlier this year, the Federal Communications Commission noted that 89.6 percent of Americans have five or more wireless competitors to choose from in their area. The merger is unlikely to diminish competition.

Some argue the merger would significantly reduce competition to two major carriers, resulting in higher consumer costs. Further, they contend higher costs would disproportionately affect Latinos and other minorities. But, once again, the market shows a different picture — one of robust competition.

Source: Justin Velez-Hagan,  ”AT&T/T-Mobile Merger will Help Latinos and Economy — If Courts Allow,” at POLITIC365.COM

Further: Should not the Congressional Black and Hispanic Caucuses be on board with the merger?

Related Articles

• New Programs Targeting Urban Poverty May Hinder Obama’s Minority Support (businessinsider.com)
• Are Blacks Abandoning Obama? (outsidethebeltway.com)
• Urban League: Empowered Enough? (theroot.com)
• African-Americans Wield Considerable Consumer Power (themilwaukeedrum.com)
• America cannot afford such inequality | Michael Shank (guardian.co.uk)
• Michael Shank: Why ‘Occupy Wall Street’ Protests? America’s High Rates of Poverty & Income Inequality (huffingtonpost.com)

Also: Are minority leaders MIA on this? What’s wrong-nothing to shout about?

Maxine Waters, have not heard from you on this!

Al Sharpton, have not heard from you on this!

Congressional Black Caucus, have not heard from you on this!

Congressional Hispanic Caucus, have not heard from you on this!

Tavis Smiley, have not heard from you on this!

Cornell West, have not heard from you on this!

NAACP, have not heard from you on this!

Talk up and be counted!

Read More

• Paging the NAACP, Al Sharpton, the Congressional Black Caucus, and FCC (michellemalkin.com)
• Jamal Simmons Says “Broadband Technology Can Help Spur Economic Development” & “We’re Moving into a Technologically Driven World” (Guest Voice Interview) (themoderatevoice.com)

 

REGULATION: AT&T withdraws FCC approval application for $39 billion T-Mobile merger deal; regulatory impact; political implications

HAPPY THANKSGIVING!

Lead

Our Lead today comes from a Blog. And, we’re commenting on the regulatory front.

AT&T has withdrawn its application to merge with T-Mobile. That’s big news in the regulatory world. But, it also may have political implications for the Administration of President Barack Obama.

Blog Quote

Following the Federal Communications Commission’s decision to send the $39-billion proposed merger of AT&T and T-Mobile USA to an administrative hearing on Tuesday, AT&T has withdrawn its official application to combine its spectrum with T-Mobile’s.

Source: Stacey Higginbotham, “AT&T backs off the T-Mobile fight,” GIGAOM.COM

Financial Consequences

Higginbotham notes further in her post: “[t]he company also said that it will take a $4-billion charge against earnings should the deal fall through.”

The deal could be dead. As noted by Seth Weintraub (quote):

But, AT&T has taken a $4B pre-tax charge in recognition that the deal isn’t likely to be going through and they are likely going to have to pay T-Mobile for the effort as part of the original merger agreement.  That means the deal is pretty much over, at least in the eyes of AT&T’s own accountants.

Source:  Seth Weintraub, “AT&T-T-Mobile Merger looks to be over, companies pursuing a tactical workout,” 9TO5MAC.COM

Justice Department Suit Continues

The U. S. Department of Justice filed an antitrust suit to block the merger.

As Higginbotham has written further in her post (quote):

AT&T still plans to fight the antitrust case that the Department of Justice has filed and has not said it plans to walk away from its deal just yet, but it clearly has realized that the forces arrayed against this combination will be hard to quell. As I noted on Tuesday, unless AT&T or T-Mobile pull the plug between now and then, the next big date should be the Department of Justice lawsuit hearing in February.

Regulatory Impact

The administrative phase of this matter before the FCC has concluded. It could be reopened later.

The immediate beneficiary of the withdrawal of the merger approval application apparently is Verizon. Kevin Fitchard argues (quote):

Of all the possible outcomes in the AT&T-Mo fallout, the FCC approving the merger with a laundry list of new regulations would have been the worst-case scenario for Verizon. It appears to have dodged a bullet.

The FCC could have required AT&T to divest spectrum and networks in numerous markets; FCC staffers had competitive concerns in 99 of the top 100 markets. It could have imposed deadlines for deployments and stricter requirements on the population and geographic areas those networks covered. It might even have dictated commercial terms on how it used that spectrum, spelling out the terms of data roaming agreements and maybe even imposing restrictions on what AT&T could charge for data service. All of these would have been anathema to Verizon.

Why? Because whatever restrictions and stipulations AT&T is forced to abide by if this merger goes through would return to haunt Verizon down the road. Verizon may be sitting pretty on a big fat LTE network today, but it readily admits it must go back to the market for more spectrum at some point.

Source:  Kevin Fitchard, “Why Verizon needs AT&T-Mo to just disappear,” GIGAOM.COM

Possible Political Implications

MJB’s take is that continuance of the Justice Department’s antitrust suit could have some political implications for the Obama Administration.

If AT&T prevails in the litigation, or if the suit is settled, AT&T can reboot the process and file another merger approval application with the FCC. A settlement of the suit probably would require the approval of Eric Holder, the Attorney General, who is one of the top Obama Administration cabinet officials and political appointees who is close to the President.

It can be expected that the handling of the litigation, particularly if the Justice Department loses, or the resolution of the case by a settlement, will make Holder a political target for criticism by the GOP and close scrutiny by Congressional committees in the GOP controlled House of Representatives.

That would not be good news for the President in an election year.

See VIDEO

On the Sidebar, under MJB News VIDEOS, we have uploaded a C-SPAN VIDEO from The Communicators segment, hosted by Peter Slen, on 09-18-2011, in which a panel discussed the implications of the AT&T/Mo merger.

The VIDEO is on C-SPAN’s YouTube Channel, and is described as follows (quote);

On The Communicators, Vonya McCann, senior vice president for government affairs at Sprint Nextel, and Larry Cohen, president of the Communications Workers of America, discuss the proposed merger of AT&T and T-Mobile. The guests will discuss the merger’s impact on the wireless industry, on jobs in the U.S. and on prices consumers pay for wireless service

Source: C-SPAN YOUTUBE CHANNEL

Read Related Web Articles

• What Happens Now to the Proposed AT&T and T-Mobile Merger? (pcworld.com)
• Thanksgiving Turkey: AT&T, T-Mobile Pull Merger Application From The FCC (paidcontent.org)
• You: AT&T Deal With T-Mobile Takes a Step Back (nytimes.com)
• AT&T and T-Mobile withdraw FCC merger application (electronista.com)
• Why Verizon needs AT&T-Mo to just disappear (gigaom.com)
• AT&T yanks T-Mobile FCC bid, cops $4bn pre-emptive charges (slashgear.com)
• AT&T to Record $4 Billion Costs on T-Mobile USA Deal Risks (businessweek.com)
• You: Deutsche Telekom Pressing on With Sale to AT&T (nytimes.com)
• FCC Chairman: AT&T/T-Mobile deal not in public interest, hearing requested, reports WSJ (digitaltrends.com)
• AT&T pulls FCC application for T-Mobile USA deal, expects $4 Billion charge (thenextweb.com)
• AT&T Withdraws FCC T-Mobile Application, Will Focus on DOJ (phonescoop.com)
• AT&T, T-Mobile deal hopes crumble (theglobeandmail.com)