AT&T’s proposed $39 billion take over of Deutsche Telekom’s T-Mobile wireless unit is essential to building an infrastructure that can sustain innovation in the wireless ecosystem, the chief of a trade association of Silicon Valley companies said Monday.
“In California, we know that innovative thinking can change the world — we’ve lived it,” wrote Carl Guardino, president and CEO of the Silicon Valley Leadership Group in an a San Francisco Chronicle editorial Monday morning. “We also know that in order to maintain our status as the world’s premier innovation hub, we need an infrastructure in place that allows us to turn innovations into new companies and investment into jobs.”
Both the U.S. Justice Department and Sprint have filed separate lawsuits against AT&T and T-Mobile to block the merger.
Many non-profit groups, such as the media reform group Free Press, Public Knowledge and the American Antitrust Institute have lined up against the merger, while many labor unions and companies and venture capitalists who back the companies support the merger both because of the promised jobs as well as the promise of better wireless infrastructure.
The Communications Workers of America, the AFL-CIO, and the National Education Association have all come out in favor of the merger. So have Brocade, Facebook, Oracle, Qualcomm, Yahoo and Microsoft. For his part, Guardino’s association represents 340 member companies. In addition to AT&T, they include household technology company names like Ebay, Google, Netflix, and dozens of other technology companies.
In his Monday editorial, SVLG’s Guardino noted AT&T’s promise to invest $8 billion in the merged network of the two companies, and the thousands of jobs that the merger is expected to create.
Deutsche Telekom has said that it wants to offload its T-Mobile wireless unit because it isn’t prepared to make the investment to upgrade its network.
The split in opinion reflects the different interests and perceptions of how the merger will play out.
Whatever happens in court between the DOJ, Sprint and AT&T and T-Mobile, the Federal Communications Commission still has to weigh in separately with different criteria to judge the merits of the merger.