AT&T Accidentally Tells Truth, Shoots Self in Foot
Free Press and other opponents of the AT&T–T-Mobile merger had reason to cheer last week when a damning document AT&T filed with the FCC was accidentally posted on a public site. The partially redacted letter, which appeared on the FCC website for several hours on Thursday before it was yanked down, punctures a hole in AT&T’s central pro-merger argument — namely that only purchasing T-Mobile would allow it to expand its 4G LTE wireless data network to 97 percent of the population.
Turns out AT&T had considered expanding its network on its own but balked at the $3.8 billion price tag. “AT&T senior management concluded that, unless AT&T could find a way to expand its LTE footprint on a significantly more cost-effective basis, an LTE deployment to 80 percent of the U.S. population was the most that could be justified,” AT&T counsel Richard Rosen wrote in the letter. So AT&T concluded that it made better strategic sense to pony up $39 billion to purchase T-Mobile.
The logic makes perfect sense if your ultimate aim is to effectively bludgeon wireless competition. If the deal goes through AT&T’s primary rival, Verizon, will fall a distant second to AT&T in the wireless arena, and collectively the two will control 80 percent of that market. Can AT&T still pretend it had nobler intentions?
Yes, it can.
“There is no real news here,” said AT&T spokeswoman Margaret Boles in a statement released in the wake of the leak. “The confidential information in the latest letter is fully consistent with AT&T’s prior filings. It demonstrates the significance of our commitment to build out 4G LTE mobile broadband to 97 percent of the population following our merger with T-Mobile. Without this merger, AT&T could not make this expanded commitment.”
Yes, it could, Margaret. It just doesn’t want to. AT&T has long pinched pennies when it comes to providing adequate and comprehensive wireless service but has no problem unlocking its bank account if the end result is total market domination.
As Free Press has reported since the merger’s announcement, it’s not just wireless carriers who will get squashed if the merger goes through. As many as 20,000 workers — likely drawn from T-Mobile’s workforce — stand to get the boot as a result of the deal. And let’s not forget ordinary consumers. Less choice translates into a power dynamic in which AT&T — and Verizon — can dictate whatever rates or terms it wishes for customers who don’t have other options to turn to. Unless, that is, you count hooking up two Dixie cups to string and bellowing communications to your neighbor.