The mega-merger between AT&T and T-mobile got a thumbs down from another member of the Senate Judiciary Committee Tuesday when Sen. Al Franken, (D-MN) sent a letter to regulators urging them to block the proposed $39 billion acquisition.
“Allowing the merger to proceed would lead to an effective duopoly in the national wireless market that would result in higher prices for consumers and potentially thousands of job losses,” Franken wrote to Julius Genachowski, the chairman of the Federal Communications Commission, and Attorney General Eric Holder.
Franken is a member of Judiciary’s antitrust subcommittee, and he’s the second senator to call for a blockage of the merger after antitrust committee chair Herb Kohl, (D-WI.)
Franken cited data supplied by Sprint (which opposes the merger) that predicts that prices for wireless phone subscribers for AT&T and T-Mobile could increase up to 25 percent post merger.
The senator pointed to the FCC’s own market statistics about competition in the wireless marketplace as evidence of how deeply anticompetitive a merger between the two telecommunications would be, and he noted that the Justice Department had previously blocked a merger between Sprint and Worldcom on the basis of a similar analysis from the FCC in 2000.
He also blamed AT&T for not investing in its network sufficiently to cope with the torrents of data traffic resulting from the popularity of the iPhone.
“Rather than simply attempting to wrest control over existing spectrum from its competitors, AT&T should focus its expenditures on making better use of the spectrum licenses it already owns,” Franken wrote.
Democrats aren’t unified on this issue however.
In June, more than 70 House Democrats wrote to the two agencies reviewing the merger to support it.
They said that they thought the merger would create jobs and bring next generation technologies to a wider swath of the country.
Facebook, Microsoft and several venture capitalists also support the deal.
T-Mobile on Tuesday issued a statement rebutting the senator.
“While we respect Senator Franken, his analysis of our pending transaction is just wrong.,” said Tom Sugrue, T-Mobile’s senior vice president of government affairs in a press statement. “The combination of T-Mobile and AT&T should be approved because it will deliver what consumers are looking for in the age of smart phones, tablets and mobile internet – speed, service quality and reduced costs.”
