AT&T to Respond to Critics

FCC filing will stress broad support for T-Mobile merger

AT&T will respond Friday to critics of their proposed merger with T-Mobile in a 200-page brief filed with the Federal Communications Commission as part of the regulator's review of $39 billion transaction.

Opponents, which have been fanning the flames since the first FCC filing deadline on May 31, will get one more shot at the merger on June 20, the regulator's final filing deadline.

By now, most everyone inside the Beltway following AT&T's blockbuster deal to acquire T-Mobile from Deutsche Telekom knows the arguments, which are, in a nutshell, that it would create a duopoly between AT&T and Verizon, which would hurt consumers. Based on a briefing and lunch with reporters Thursday, AT&T's second pleading will go over much of the same ground. "This deal has always been about the spectrum and creating capacity," says Bob Quinn, svp, federal regulatory and chief privacy officer, AT&T.

But AT&T said it will spend the most time making the case that it has broad support from all sectors of the economy, hoping to lessen the impact of its critics, which include competitors Sprint, MetroPCS and Leap Wireless, and Washington, D.C.-based special interest groups such as Free Press and Public Knowledge.

In its defense, AT&T distributed an impressive four-page list of supporters that included ten labor unions, 82 national organizations, 15 governors, 17 groups representing African-Americans, 14 Hispanic American groups, Asian American groups, disability organizations, and high tech companies such as Microsoft, Oracle, Facebook, Yahoo and the Silicon Valley Leadership Group. (AT&T just returned from a trip to California to shore up support there, perhaps hoping to persuade Apple and Google, who have so far remained silent.)

Outside the Beltway, public opinion has been less kind, but that doesn't seem to worry AT&T. "It's not a public opinion poll," Quinn says. "Just because Free Press can generate a couple thousand comments from their Web site, that's not the kind of evidence that has to be submitted into a regulatory proceeding to see if this merger complies with the laws."

In addition to emphasizing how much support it has, AT&T will specifically address a number of its opponent’s arguments, including how the merger will create capacity (and decrease prices) and solve a short-term spectrum problem.

As for Sprint, which has the most to lose from the merger, AT&T claims there's no love lost between the two companies. "Sprint is inconsistent with what it says inside the Beltway and with everyone else," says Joan Marsh, vp, federal regulatory, AT&T.

The confident telecom giant expects there will be conditions. "We understand there will be some divestitures and we'll work through them on a market by market basis," says Quinn.