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Only If You're AT&T Does 1 + 1 = 3
Support for AT&T merger unravels because numbers don't add up
WASHINGTON - August 12 - The case for AT&T’s takeover of T-Mobile continues to unravel as new facts come to light. A Stifel Nicolaus poll of telecom analysts released Thursday gave the deal only a 49.5 percent chance of being approved.
On Thursday, documents filed by AT&T with the Federal Communications Commission, and obtained by Communications Daily, exposed AT&T's bogus claims that it can't build out 4G LTE service to the entire country unless it acquires T-Mobile. Comm Daily reports that in the filing, AT&T admitted that expanding its most advanced network to 97 percent of the country would cost only an estimated $3.8 billion. But the filing shows AT&T rejected that option, claiming there wasn’t a “viable business case” to justify the expansion.
Yet the company is willing to spend $39 billion on the T-Mobile takeover — 10 times as much. And the company is committed to paying T-Mobile $6 billion in total compensation if the deal falls through, $2.2 billion more than it would cost to expand its service.
On Friday, Free Press also obtained an AT&T "fact" sheet being used to lure support for the merger. The fact sheet features the claim that the proposed combination of AT&T and T-Mobile is the "rare case where 1 + 1 = 3."
Free Press President and CEO Craig Aaron made the following statement:
"Only at AT&T does one plus one equal three. You can call it fuzzy math or you can call it lying, but AT&T's case for this takeover doesn't withstand scrutiny. As the real numbers and facts come to the public's attention, support for this merger continues to unravel. The Department of Justice and the FCC have all the evidence they need to block this dangerous deal.
"We now know the truth: AT&T is willing to pay a $39 billion premium for one reason and one reason only — to kill off the competition. It would cost AT&T one-tenth of the merger’s cost to expand its network than to buy up T-Mobile. Yet AT&T is willing to pay a 900-percent markup to take out a lower-priced competitor and make sure it can lock in and gouge consumers in the future. The only thing stopping AT&T from expanding its network is greed. One plus one does not equal three, but subtracting one competitor adds up to billions in profits for AT&T and thousands of Americans out of work.
"AT&T has already told Wall Street it plans to cut investment by $10 billion if the deal goes through. And there has never been a merger that didn't lead to job cuts—or synergies, as AT&T calls them. At a moment when Washington claims to be all about job creation, policymakers are staring at a deal that will likely push another 20,000 workers into the unemployment line.
"It's no surprise AT&T is trying to hide the tens of thousands of jobs it will cut, making false claims about bringing service to rural areas or evading questions about future price hikes. But those who have taken AT&T at its word would be wise to recheck the facts and figures they're using. They'll find that AT&T's case for the merger simply doesn't add up."