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AT&T Gambles and Again Loses

Thursday, 01 December 2011 04:38 By Josh Levy, The SavetheInternet.com Coalition Blog | Report

Last Tuesday, the FCC called for an "administrative hearing" on the AT&T/T-Mobile merger that signaled the agency’s opposition to the deal.

The next day AT&T responded that it was taking its ball and going home. The phone giant announced that it was pulling its merger application from the FCC, and would focus its efforts on addressing the Justice Department's lawsuit to block the deal.

AT&T hoped its move would stop the FCC from releasing a damning report detailing its findings about the proposed merger. The company knew this report would back up the agency’s claim that the takeover would harm the public interest. AT&T gambled that without the application in hand, the FCC wouldn’t publish the draft report.

Today AT&T lost that bet. The FCC — which has been winning chutzpah points lately — announced that it will allow AT&T to withdraw its application, but that it will also release its draft report ... all 109 pages of it.

From the beginning, it’s been clear that this merger would kill tens of thousands of jobs, raise prices for consumers and destroy competition in the wireless market. This draft report will likely confirm this (we’ve only just begun to read it). This development is just one more indication that this deal is done.

Here's the statement from Free Press President and CEO Craig Aaron:

"This disastrous deal was nothing more than AT&T’s attempt to reduce competition and pad profits while leaving American consumers with higher bills and fewer choices. The FCC staff's thorough takedown of the takeover should signal the end of AT&T’s job-killing bid for T-Mobile. No combination of divestitures, conditions or revisions to this terrible proposal could justify such harmful concentration of power in the wireless market.

"It’s encouraging to see that lying still has negative consequences in Washington. FCC staff found no reason at all to believe AT&T's flawed pricing studies and engineering models — much less AT&T's wild claims about the merger's impact on wireless service, rural broadband coverage and jobs. This confirms what Free Press has been saying about this merger for months: that AT&T's arguments about its supposed benefits are complete fabrications. As the document explains in devastating detail, AT&T's own internal projections and past practices flatly contradict the sales pitch put forward by the company’s lawyers, lobbyists and PR flacks.

"Despite AT&T's deceptions, and the supportive letters it manufactured and extracted on the basis of empty promises, the public can now clearly see that its claims are baseless.  Elected officials and advocacy organizations have every reason to want better broadband, at more affordable prices, delivered in ways that create jobs.  This takeover would have served none of those goals. 

“We hope the product of this exhaustive FCC process serves as a caution to politicians and interest groups that too readily accepted the unsupported claims and contributions of a corporation desperately seeking their favor.

"The FCC's transaction team deserves the gratitude of the American public for its thorough and honest evaluation of this merger. Chairman Genachowski should be praised for refusing to let AT&T bury its findings in an 11th-hour maneuver. Its formal withdrawal of the FCC application was nothing more than a tactical gambit intended to block the truth about this harmful deal from public view. The idea that AT&T deserved a chance to preview or rebut the staff report is laughable, considering the deal's proponents had eight full months to make their case at the FCC and failed to do so. And complaining that the merging parties deserved a hearing on the staff's findings sounds awfully strange coming from companies that pulled their application just to evade that very same hearing.

"We thank Chairman Genachowski for the decision to move ahead, and Commissioners Clyburn and Copps for their insightful statements accompanying the release of the staff report.

"AT&T needs to heed the rejection of this deal by policymakers and the public and abandon its effort to take over T-Mobile once and for all."

Josh Levy

Josh Levy is the Internet Campaign Director for Free Press and the Free Press Action Fund. He was formerly the managing editor of Change.org, a social action site, and was a frequent commentator on the use of technology in the 2008 election as associate editor of techPresident and the Personal Democracy Forum.


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AT&T Gambles and Again Loses

Thursday, 01 December 2011 04:38 By Josh Levy, The SavetheInternet.com Coalition Blog | Report

Last Tuesday, the FCC called for an "administrative hearing" on the AT&T/T-Mobile merger that signaled the agency’s opposition to the deal.

The next day AT&T responded that it was taking its ball and going home. The phone giant announced that it was pulling its merger application from the FCC, and would focus its efforts on addressing the Justice Department's lawsuit to block the deal.

AT&T hoped its move would stop the FCC from releasing a damning report detailing its findings about the proposed merger. The company knew this report would back up the agency’s claim that the takeover would harm the public interest. AT&T gambled that without the application in hand, the FCC wouldn’t publish the draft report.

Today AT&T lost that bet. The FCC — which has been winning chutzpah points lately — announced that it will allow AT&T to withdraw its application, but that it will also release its draft report ... all 109 pages of it.

From the beginning, it’s been clear that this merger would kill tens of thousands of jobs, raise prices for consumers and destroy competition in the wireless market. This draft report will likely confirm this (we’ve only just begun to read it). This development is just one more indication that this deal is done.

Here's the statement from Free Press President and CEO Craig Aaron:

"This disastrous deal was nothing more than AT&T’s attempt to reduce competition and pad profits while leaving American consumers with higher bills and fewer choices. The FCC staff's thorough takedown of the takeover should signal the end of AT&T’s job-killing bid for T-Mobile. No combination of divestitures, conditions or revisions to this terrible proposal could justify such harmful concentration of power in the wireless market.

"It’s encouraging to see that lying still has negative consequences in Washington. FCC staff found no reason at all to believe AT&T's flawed pricing studies and engineering models — much less AT&T's wild claims about the merger's impact on wireless service, rural broadband coverage and jobs. This confirms what Free Press has been saying about this merger for months: that AT&T's arguments about its supposed benefits are complete fabrications. As the document explains in devastating detail, AT&T's own internal projections and past practices flatly contradict the sales pitch put forward by the company’s lawyers, lobbyists and PR flacks.

"Despite AT&T's deceptions, and the supportive letters it manufactured and extracted on the basis of empty promises, the public can now clearly see that its claims are baseless.  Elected officials and advocacy organizations have every reason to want better broadband, at more affordable prices, delivered in ways that create jobs.  This takeover would have served none of those goals. 

“We hope the product of this exhaustive FCC process serves as a caution to politicians and interest groups that too readily accepted the unsupported claims and contributions of a corporation desperately seeking their favor.

"The FCC's transaction team deserves the gratitude of the American public for its thorough and honest evaluation of this merger. Chairman Genachowski should be praised for refusing to let AT&T bury its findings in an 11th-hour maneuver. Its formal withdrawal of the FCC application was nothing more than a tactical gambit intended to block the truth about this harmful deal from public view. The idea that AT&T deserved a chance to preview or rebut the staff report is laughable, considering the deal's proponents had eight full months to make their case at the FCC and failed to do so. And complaining that the merging parties deserved a hearing on the staff's findings sounds awfully strange coming from companies that pulled their application just to evade that very same hearing.

"We thank Chairman Genachowski for the decision to move ahead, and Commissioners Clyburn and Copps for their insightful statements accompanying the release of the staff report.

"AT&T needs to heed the rejection of this deal by policymakers and the public and abandon its effort to take over T-Mobile once and for all."

Josh Levy

Josh Levy is the Internet Campaign Director for Free Press and the Free Press Action Fund. He was formerly the managing editor of Change.org, a social action site, and was a frequent commentator on the use of technology in the 2008 election as associate editor of techPresident and the Personal Democracy Forum.


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