The Federal Communications Commission isn’t happy with AT&T over its proposed merger with T-Mobile and now, the feeling is mutual: AT&T on Thursday released a lengthy blog post admonishing the FCC for what it deemed was unfair treatment.
Specifically, AT&T targeted the FCC’s unprecedented decision on Tuesday to publicly release a detailed report on its review of the proposed $39 billion merger, which the FCC found wasn’t in the public interest.
“The document is so obviously one-sided that any fair-minded person reading it is left with the clear impression that it is an advocacy piece, and not a considered analysis,” writes AT&T exec Jim Cicconi in a blog post.
AT&T’s Cicconi continues, blasting the FCC’s staff for what AT&T says was a biased and selective analysis of the merger:
The report cherry-picks facts to support its views, and ignores facts that don’t. Where facts were lacking, the report speculates, with no basis, and then treats its own speculations as if they were fact. This is clearly not the fair and objective analysis to which any party is entitled, and which we have every right to expect.
Cicconi attempts to rebut several of the FCC’s findings in the report, including the FCC’s contention that a combined AT&T and T-Mobile would create levels of market share concentration in “99 of the 100 largest local wireless markets” that could be considered anticompetitive.
AT&T’s Cicconi says that the FCC is imposing a double-standard in this particular instance, overlooking competition from U.S. Cellular, Leap, and Metro PCS “all of which have a higher market share than T-Mobile in numerous major markets across the U.S.”
Indeed, while that is the case insofar as some local wireless markets are concerned, AT&T sidesteps the FCC’s assertion that the merger would give the combined AT&T/T-Mobile dominance in the “largest” markets.
Cicconi’s blost post also takes on an even more topical public issue: jobs. While AT&T and some of the advocacy groups supporting the merger (who have not-so-coincidentally received financial backing from AT&T) counter-intuitively claim that the combined companies would create 96,000 jobs, the FCC instead found in its report that it would create no new jobs and could lead to losses.
Yet Cicconi turns the FCC’s own words back on the agency, pointing out that the FCC’s much-hyped $4.5 billion rural broadband fund, unveiled in October, is supposed to create 500,000 jobs and $50 billion in economic growth over the six years of its roll-out.
“This notion — that government spending on broadband deployment creates jobs and economic growth, but private investment does not–makes no sense,” Cicconi writes.
However, it’s worth noting that the FCC’s rural broadband fund, the “Connect America Fund,” isn’t anything like a merger, but rather a development aid program that subsidizes the expansion of broadband service and infrastructure to sparsely populated areas that wouldn’t otherwise be attractive to private companies. The program is paid for by surcharges on customer and company phone bills.
Finally, Cicconi effectively accuses the FCC of pandering to public sentiment, writing: “this [report] was intended more for advocacy and to impact public perceptions. And neither is a proper basis for action by a regulatory agency.”
The FCC didn’t wait long to hit back, releasing the following statement to the Los Angeles Times:
“The AT&T/T-Mobile merger would result in the single greatest increase in wireless industry consolidation ever proposed. The FCC’s expert staff dispassionately analyzed all of the facts, including the arguments AT&T rehashes today…The transaction would decrease competition, innovation and investment, and harm consumers. In addition, AT&T’s own filings, many of which they have kept confidential, show that the deal would lead to massive job losses.”
The official FCC Twitter account later tweeted: “Deeply concerned about @ATTPublicPolicy J. Cicconi comments today re: FCC’s role in protecting US consumers. ~J.Gurin, Chief Consumer Bureau.”
We’ve reached out to the AT&T and FCC for more information on what they are planning next — and where they think this war of words will end up — and will update when we receive a response.
