AT&T Misleads Congress on Merger

According to press reports, more than 70 Democrats have signed a letter to the Federal Communications Commission and the Justice Department touting the alleged benefits of AT&T's proposed takeover of T-Mobile.

While it does not endorse the merger, the letter claims the deal would bring the benefits of broadband to rural communities that would otherwise not have access. This is untrue: On June 10, AT&T reported to the FCC that, even without the merger, it plans to deploy next generation "4G service to 97 percent of the population by the end of 2012."

The letter also suggests AT&T's takeover will result in billions of dollars in additional investment and the creation of thousands of jobs. But AT&T has told Wall Street the merger will result in less investment and more layoffs.

Free Press Action Fund Research Director S. Derek Turner made the following statement:

"Members of Congress should be more careful about signing any letter that AT&T puts in front of them. This letter is riddled with misleading and factually inaccurate statements that contradict what the company is telling investors and regulators. It is simply wrong on the facts.

"This letter cites promises from AT&T to bring wireless broadband to 97 percent of the country, including areas where it claims Americans may not otherwise see the benefits of broadband. But the truth is that it won't take a merger to get next-generation mobile broadband to rural and underserved communities. AT&T has already publicly committed to expanding its 4G coverage to the same 97 percent by 2012 without the merger, and Verizon has done the same.

"The letter is also dead wrong when it suggests that AT&T's takeover will result in billions of dollars in additional investment and the creation of thousands of jobs. AT&T has already told Wall Street that it expects to spend at least $10 billion less in capital investment over the coming years. This drop in investment will unquestionably lead to fewer jobs. And the only benefits tens of thousands of T-Mobile workers will see from this deal are unemployment benefits.

"If the members of Congress who signed this letter had taken the time to examine the public record, they would have seen right through AT&T's phony promises. We expect the Justice Department and FCC will be much more skeptical of AT&T's claims and conclude based on the evidence that this merger's only 'benefit' will be fattening AT&T's bottom line at the expense of American workers and consumers."

Read the House letter here: https://www.freepress.net/files/ATTTMobile_Merger_Letter_Butterfield.pdf

Free Press Action Fund also sent a letter this week to Congress, debunking AT&T's misleading claims. Read our letter here: https://www.freepress.net/files/Letter_to_House_6_22_11_FNL.pdf