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AT&T, T-Mobile Get Earful From Democrats

Hearing on deal focuses on prospect of new Ma Bell
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WASHINGTON—The Democrats on the Senate Judiciary Subcommittee on Antitrust, Competition Policy, and Consumer Rights, who are holding a hearing here today on the proposed sale of T-Mobile to AT&T, have made their position, and their main question, plain. Nodding to the past, and to the breakup of Ma Bell in the 1980s, they titled their hearing, "Is Humpty Dumpty Being Put Back Together Again?"

The subcommittee's Democrats have, so far, stayed on that message. 

In his opening statement, Sen. Herb Kohl, D-Wisc., said to the CEOs of AT&T and T-Mobile—Randall Stephenson and Philipp Humm, respectively—"A deal creating such huge national market shares in an already highly concentrated industry make it incumbent on you, Mr. Stephenson and Mr. Humm, to justify why we should permit it."

"I'm a bit skeptical," added Sen. Patrick Leahy, D-Vt., chairman of the Judiciary Committee, who complained of lack of coverage in rural areas by AT&T and T-Mobile. "I'm worried that rural areas of our state will be left out," he said.

The gist of the testimony from AT&T's Stephenson and T-Mobile's Humm was predictable. Stephenson stressed in his first sentence that the deal would lead to consumer benefits, while Humm argued that T-Mobile parent Deutsche Telekom had to sell in order to improve the service for consumers. "This is a vibrant, active, competitive market," Stephenson said.

But it was Gigi Sohn, the feisty president of liberal group Public Knowledge, who turned everyone’s head when she referred to a T-Mobile ad that slams its prospective owner over poor reception.

"That commercial illustrates the market we have today. If we don't stop this merger, we will go back to the days when this phone was in use," she said, holding up a very old cell phone the size of a brick. 

"Almost 5,000 individuals have written to the Federal Communications Commission in their own words to object to the merger," Sohn added.

Dan Hesse, CEO of Sprint, which would be a distant also-ran if the deal is approved and has been vocal in opposing it, also testified. He made sure to refer back to the hearing's title. "Robust competition is driving prices down and quality up. Creating an entrenched duopoly will reverse [competition]. It would, as this hearing's title suggests, put Ma Bell back together."

Despite tough questioning from Kohl and Leahy, along with Minnesota Democrats Sen. Amy Klobuchar and Sen. Al Franken Stephenson could probably chalk it all up as a good day.

"We feel confident this transaction will be approved," he told reporters immediately following the hearing. "There will be concessions of course. We've done a number of these transactions, large and small and in each transaction, there have been concessions and we agreed to divest certain assets. So I have no doubt this will have similar requirements."

Stephenson reiterated the company's belief that the process of obtaining approval from the FCC and Department of Justice should take about a year.