Sen. Kohl Asks Govt. to Block AT&T/T-Mobile Deal

Says merger will cause substantial harm to competition and consumers, violate antitrust law

By John Eggerton -- Broadcasting & Cable, 7/20/2011 2:39:03 PM

Senate Antitrust Subcommittee Chairman Herb Kohl (D-Wis.) has asked the FCC and Justice in no uncertain terms to deny the proposed $39 billion merger of AT&T and T-Mobile.
 
In a letter to both Wednesday, Kohl said that he had concluded that the deal would cause "substantial harm to competition and consumers," would be in violation of antitrust law and would not be in the public interest.
 
He said that, as a result, the deal should be blocked.
 
Kohl argues that the deal would likely "substantially lessen competition" in violation of the Clayton Act and be "highly dangerous" to consumers and competition.
 
Kohl said he found no merit in any of AT&T or T-Mobile's defenses of the deal and says they have not made the requisite showing of the claim that the deal is needed to expand mobile broadband to rural areas where it does not exist, and better serve urban areas where it "contends" AT&T is running out of spectrum.
 
Kohl points out that during hearings in his subcommittee on the deal, there was "considerable testimony" on the issue of 4G rollouts. "It seems that AT&T could achieve the goal of improving service by spending a portion of the $39 billion it plans to spend to acquire T-Mobile, and without seriously injuring competition in the process."
 
"Senate Antitrust Subcommittee Chairman Herb Kohl set out as clearly and definitively as possible why AT&T should not be allowed to buy T-Mobile," said Public Knowledge President Gigi Sohn. "We agree wholeheartedly with his conclusion that the deal, if allowed to go through, ‘would likely cause substantial harm to competition and consumers' and should be blocked.  We agree as well with his statement that all of the reasons given for the merger ‘are without merit' and that there are no ‘feasible or practical' conditions which could be placed on the merger to improve it."
 
AT&T suggested Kohl was out of the mainstream, and off base with his characterizations.
 
"We respect Senator Kohl. However, we feel his view is inconsistent with antitrust law, is shared by few others, and ignores the many positive benefits and numerous supporters of the transaction," said an AT&T spokesperson. "This is a decision that will be made by the Department of Justice and the FCC under applicable law and after a full and fair examination of the facts. We continue to believe those reviews will result in approval of this transaction."